Which of the Following Is True When the Futures Price

question 9

Multiple Choice

Which of the following is true when the futures price exceeds the spot price?

• A) Calls on futures should never be exercised early
• B) Put on futures should never be exercised early
• C) A call on futures is always worth at least as much as the corresponding call on spot
• D) A call on spot is always worth at least as much as the corresponding call on futures

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Definitions:

Facts in Context

Presenting or understanding information or data within its relevant situation, environment, or circumstances to ensure accurate comprehension.

Organize Messages

The act of arranging or structuring communication in a clear and coherent manner to ensure effective conveyance of information.

Pattern

A repeated decorative design or a regular and intelligible form or sequence discernible in the way in which something happens or is done.

Confidential Communication

Information exchanged between parties with the expectation that it will not be disclosed to unauthorized individuals or entities.