In the Corn Futures Contract a Number of Different Types

question 8

Multiple Choice

In the corn futures contract a number of different types of corn can be delivered (with price adjustments specified by the exchange) and there are a number of different delivery locations.Which of the following is true

• A) This flexibility tends increase the futures price.
• B) This flexibility tends decrease the futures price.
• C) This flexibility may increase and may decrease the futures price.
• D) This flexibility has no effect on the futures price

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Definitions:

Reverse Fault

A reverse fault is a type of geological fault where the hanging wall moves upward relative to the footwall, typically occurring in areas of compression like the boundaries of convergent tectonic plates.

Thrust Fault

A type of fault in which one rock stratum is pushed up and over another due to compressional forces.

Hypocenter

The point within the Earth where a seismic rupture starts, commonly known as the focus of an earthquake.

Epicenter

The point on Earth’s surface directly above where an earthquake occurs (directly above the focus or hypocenter).