Speculators Will Sell Futures Contracts When They Believe Future Demand

question 42

True/False

Speculators will sell futures contracts when they believe future demand will be lower than suppliers expect.

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Definitions:

Double-Declining-Balance Method

A form of accelerated depreciation where an asset loses value at twice the rate of the traditional straight-line method.

Depreciation

Methodically dividing the cost of a tangible asset throughout its effective life.

Residual Value

The estimated amount that an asset will be worth at the end of its useful life, after it has been fully depreciated.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.