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A Futures Contract Can Make a Future Price Certain

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A futures contract can make a future price certain.


Definitions:

Bonds Payable

Long-term debt securities issued by corporations or governments, promising to pay the holder a specified amount of interest and to repay the principal at maturity.

Contract Interest Rate

The interest rate specified within a financial contract, such as a loan or bond agreement, that determines the interest payments.

Paid-In Capital

Capital contributed to a corporation by the stockholders and others.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation and a claim on part of the company’s profits.

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