Assume No Transactions Costs Exist for Any Futures or Forward

question 59

Multiple Choice

Assume no transactions costs exist for any futures or forward contracts. The price of the euro futures with a settlement date 180 days from now will:

• A) definitely be above the 180-day forward rate.
• B) definitely be below the 180-day forward rate.
• C) be about the same as the 180-day forward rate.
• D) none of the above; there is no relation between the futures and forward prices.

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Definitions:

Zinc

A chemical element with symbol Zn and atomic number 30, it is a necessary mineral for human health, involved in various biochemical processes.

Iron

A chemical element with symbol Fe and atomic number 26, known for its metallic properties and crucial role in biological processes like oxygen transport in hemoglobin.

Hydrogen Bonds

Weak bonds between partially positive hydrogen atoms and partially negative atoms, such as oxygen or nitrogen, important in the structure of water and biological molecules.

Cohesiveness

The characteristic of molecules or particles sticking together in a mass, important in various physical and biological processes.