As an Economic Function of Futures Markets, What Does "Price

question 3

Multiple Choice

As an economic function of futures markets, what does "price discovery" mean?

• A) The futures price and spot price converge over time.
• B) The spot price is a discounted value of the futures price.
• C) The futures price provides information about the expected future spot price.
• D) In equilibrium, the spot price and futures price are equal.

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Definitions:

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, resulting in harm or damage.

Loss of Income

A monetary loss resulting from an inability to work and earn money due to injury, disability, or other reasons.

Defence

The reasons, facts, or legal arguments presented by the defendant to contest or mitigate the claims made by a plaintiff in a legal case.

Ultimate Consumer

The end-user of a product or service who uses it for personal, non-commercial purposes.