The Value of a Futures Contract for Storable Commodities Can

question 32

Multiple Choice

The value of a futures contract for storable commodities can be determined by the _______, and the model __________ consistent with parity relationships.

• A) CAPM; will be
• B) CAPM; will not be
• C) APT; will not be
• D) APT; will be
• E) CAPM and APT; will be

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Definitions:

EZ Ice Cream Inc.

Presumably a fictional company; without more context, it would represent a hypothetical business entity.

Condition Precedent

A condition in a contract that must be met before a party’s promise becomes absolute.

Condition Subsequent

A condition in a contract that operates to terminate a party’s absolute promise to perform.

Express Condition

A clearly stated, specific requirement within a contract that must be met for the contract to be fulfilled or an obligation to become due.