Question: The primary purpose ( s ) for futures to be traded is ( are ) : A . the process of price discovery B .

The primary purpose(s) for futures to be traded is (are):
A. the process of price discovery
B. a mechanism to reduce or eliminate the risk of fluctuating cash prices

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

A trader enters into a short heating oil futures contract when the futures price is $1.81 per gallon. The contract is for the delivery of 42000 gallons. How much does the trader gain or lose if the...

Q:

Changing prices are a powerful signal to the market about particular companies. But the price discovery mechanism requires a freely traded market which is not manipulated by governments. In March...

Q:

I need a step by step solutions for the 10 problems in the excel file. The correct answers are provided I only need the solutions steps. Subject is Finance (options valuation) On March 2, a Treasury...

Q:

Evaluate the potential gains and losses for forwards,future,call options,put options and swaps. Outline and describe the different risks that each type of derivative contract faces. Describe...

Q:

Financial Engineering ASSIGNMENT A QI. A swap bank has to entail certain risks which are inherent to the swap business and are interrelated Explain the risks involves in swap business. Q2. Call...

Q:

Chapter 12:12.3 #4 (p. 305) What kinds of risk are included in investment risk? Go online to survey current or recent financial news. Find and present a specific example of the impact of each type of...

Q:

21. Which of the following is a similarity between forwards and futures? Both are traded in the over-the-counter market. Both can be tailored to meet specific customer needs. Both trade on an...

Q:

Access the February 20, 2015, filing of the December 31, 2014, 10-K report of The Hershey Company (ticker HSY) atwww.SEC.govand complete the following requirements. Required Compute or identify the...

Q:

Access the February 20, 2015, filing of the December 31, 2014, 10-K report of The Hershey Company (ticker HSY) atwww.SEC.govand complete the following requirements. Required Compute or identify the...

Q:

1. The net operating cycle equals 10 (minus 10). Which if the following responses are the correct one (2 Points) It is a result of a situation in which number of days in inventory equals to 30 days...

Q:

The standard enthalpy of atomization of an element is the energy required to convert one mole of an element in its most stable form at 25C to one mole of monatomic gas. Given that the standard...

Q:

A system has a process function with K = 10 and negative unity feedback with a PD compensator Gc(s) = Kp + KDs. The objective is to design Gc(s) so that the overshoot to a step is less than 5% and...

Q:

Q . 1 - a ( 1 . 5 marks ) Determine the following for the below given cash flow: i . Calculate the payback periods for each project ( 0 . 5 mark ) ii . Determine whether it is meaningful to calculate...

Q:

Can you elucidate the role of molecular chaperones and protein quality control systems in maintaining the integrity and homeostasis of the cytoplasm, particularly under conditions of cellular stress...