Assume No Transactions Costs Exist for Any Futures or Forward

question 3

Multiple Choice

Assume no transactions costs exist for any futures or forward contracts. The price of British pound futures with a settlement date 180 days from now will:

• A)definitely be above the 180-day forward rate.
• B)definitely be below the 180-day forward rate.
• C)be about the same as the 180-day forward rate.
• D)none of the above; there is no relation between the futures and forward prices.

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Definitions:

Peripheral Nervous

refers to the part of the nervous system that lies outside the central nervous system, comprising nerves and ganglia, responsible for relaying information to and from the body and brain.

Endocrine

Relates to the system of glands that release hormones directly into the bloodstream to regulate various bodily functions, including growth, metabolism, and mood.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column.

Autonomic Nervous System

A part of the nervous system responsible for controlling involuntary bodily functions such as heartbeat and digestion.