As Time Draws Closer to Contract Expiration, Futures Contract Prices

question 119

Multiple Choice

As time draws closer to contract expiration, futures contract prices can be expected to:

• A)increase as the demand for delivery intensifies.
• B)decrease as speculators resolve the uncertainty of prices.
• C)move similarly to broad-based market indices, such as the TSX 300
• D)converge upon the spot price.

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Definitions:

Probability Distribution

A mathematical description of outcomes in a statistical experiment, detailing how probabilities are distributed across the various possible outcomes.

Mobile Phone Store

A store focused on selling mobile phones, accessories, and related services.

Joint Probability Distribution

The probability distribution that encompasses the probabilities of various outcomes for two or more random variables simultaneously.

Mobile Phone Store

A retail outlet specializing in the sale of mobile phones and related accessories, including various brands and models, often providing services like repair and technical support.