If People Suddenly Expect That a Severe Drought Will Reduce

question 151

Multiple Choice

If people suddenly expect that a severe drought will reduce the supply of grain, the price of grain futures will be:

• A) high and then bid lower.
• B) bid higher.
• C) low and bid even lower.
• D) bid lower.

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Definitions:

Ordinary General Annuity

A sequence of uniform payments made at consistent intervals, where interest is calculated and added at each period's conclusion.

Present Value

Present Value is a financial concept that represents the current worth of an amount that is to be received in the future, discounted to reflect the time value of money and interest rates.

Accurate To The Cent

Describes a level of precision in financial calculations or measurements that are exact to the smallest denomination of currency, such as a cent in the U.S. dollar.

Periodic Interest Rate

The rate of interest charged on a loan or earned by an investment for a duration that is less than one year.