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Futures prices are primarily determined by two complementary forces. 1.Underlying asset is liquid, covered interest arbitrage assures that futures prices are equal to forward prices
Futures prices are primarily determined by two complementary forces.
1.Underlying asset is liquid, covered interest arbitrage assures that futures prices are equal to forward prices according to interest rate parity;
2 When the underlying asset is illiquid, arbitrage cannot enforce the equality of futures and forward prices.
Which one is more important for Bitcoin Futures? and why?
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