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If the Futures Rate Is Lower Than the Forward Rate

question 65

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If the futures rate is lower than the forward rate, astute investors would attempt to simultaneously buy futures and sell forward. Such actions would place downward pressure on the futures price and upward pressure on the forward rate.


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Persons who experience fulfillment or contentment in aspects of their life or work.

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Imperfections, faults, or weaknesses that detract from perfection and can affect performance or function.

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Characterized by lack of movement, flow, or growth, often suggesting something that has become stale or obsolete due to inactivity or lack of change.

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