What Happens to the Price of a Futures Contract as Expiration

question 112

Multiple Choice

What happens to the price of a futures contract as expiration draws closer?

• A) It exceeds the spot price of the asset.
• B) It is exceeded by the spot price of the asset.
• C) It approaches the spot price of the asset.
• D) There is no relationship between futures price and spot price as the contract approaches expiration.

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Definitions:

Labor Hours

The total number of hours worked by all employees of a company.

Acceptance

In contract law, the offeree's indication to the offeror that the offeree agrees to be bound by the terms of the offeror’s offer or proposal to form a contract.

Offer

A promise or commitment to do or refrain from doing some specified thing in the future.

Breach of Contract

The violation of a contractual obligation or a failure to perform any promised act or obligation.