The Value of a Wheat Futures Contract Is Based on the Expected

question 2

Multiple Choice

The value of a wheat futures contract is based on the expected price of wheat, so it is an example of a(n)

• A) stock.
• B) derivative.
• C) option.
• D) none of the above.

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Definitions:

Price Level

The average cost across all sectors of goods and services produced in the economy.

Percent

A mathematical term describing a fraction or ratio as parts per hundred, used to indicate proportions and changes in quantities.

Deflation

A decline in the general price level of goods and services, often indicating a reduction in the supply of money and credit in the economy.

Purchasing Power

Purchasing power refers to the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.