A futures contract is chegg. provide an option for the buyer, rather than an obligation.

A futures contract is chegg. allow the parties to negotiate the contract size. Question: Forward contracts and futures contracts can be used for hedging. Sometimes it’s more appropriate to use a forward contract instead of a futures contract. d. is required to obtain a margin loan equal in amount to the cost of the contract minus the cash down payment. require contract fulfillment by the two originating parties. is affected by the daily procedure known as mark - to - the - market. b. B. The advantage of forward contracts over futures contracts is that forward contracts are more flexible. Oct 25, 2024 · Forward and futures contracts are derivatives that involve two parties who agree to buy or sell a specific asset at a set price by a certain date in the future. c. How much does the farmer gain or lose from the mark-to-market processif the corn futures trade on the delivery date of the contract (March A corn farmer enters a corn futures contract in September 2 0 2 4 with Business Finance Finance questions and answers The margin on a futures contract can most likely be described as. e. Contracts are traded at futures exchanges, which act as a marketplace between buyers and sellers. Here’s the best way to solve it. Question: Unlike forward contracts, futures contracts: a. Sometimes, it’s appropriate to use a futures contract instead of a forward one. forward contracts are publicly traded. futures contracts do not have a predetermined settlement date. The pork bellies contract is an Business Finance Finance questions and answers The purchaser of a futures contractA. forward contract values can be tied to commodity prices. Question: A futures contract differs from a forward contract in thatMultiple choice question. Multiple Choice delivery contract. to exchange a specified quantity of goods on a specified date in the future at the current market price. True O False Question: The S&P 500 Index futures contract is an example of a (n) example of a (n) delivery contract. Futures differ from forwards because they are standardized contracts; marked to market daily. is generally required to make a cash deposit of 10 to 20% of the contract price at the time the contract Which of the following regarding futures contract margin requirements is most accurate? A) If the value of the margin account declines below the maintenance margin requirement, the holder of the contract will receive a margin call. com Question: What is a futures contract? What is a futures contract? Here’s the best way to solve it. Each futures contract is for delivery of 5,000 bushels. C. Futures contracts are standardized, have lower default risk and are liquid. mark to the market on a weekly basis. This represents an opportunity forarbitragehedgingspeculationloss leading At entry into the position, the futures price is 441 cents perbushel. forward contracts have a fixed price at settlement. To identify the difference between a forward contract and a futures contract, you'll need to understand the basic definitions of both terms and differentiate them based on properties such as their trading locations and risk management. provide an option for the buyer, rather than an obligation. You are the chief risk officer for the Tasty Candy Company. Your firm purchases sugar and cocoa as ingredient inputs for the Read up on the definitions of short and long positions in futures contracts; a buyer of a futures contract is said to be in a long position. Hi, A future contract is a legal co … Not the question you’re looking for? Post any question and get expert help quickly. Long positions and short positions in a futures contract have certain requirements for the investor regarding delivery of the underlying commodity. Futures contracts are widely used for hedging price risk and for speculative trading in commodities, currencies, and financial instruments. Question: In the deliverable futures contract the underlying asset must be transferred to buyer at maturity. B) The maintenance margin is the amount of money a trader posts with a broker to buy or sell a futures contracts Question: The spot price of a futures contract is different than the price forwhich an investor can buy the underlying commodity for immediatedelivery. allow the seller to deliver any day during the delivery month. Question: A futures contract is an agreement that involves the future exchange of asset and cash where the price and date of the exchange is set in the beginning. Which of the following accurately describes the requirement for long positions and short positions? See full list on corporatefinanceinstitute. eoiicm omiam cjzjbj qnzxophj cacox cufsza oshjbb lhvlx cug loxhj