On the Day of Delivery

question 65

Multiple Choice

On the day of delivery

• A)the spot price will equal the futures price.
• B)the spot price will be greater than the futures price by an amount equal to the current interest rate times the futures price.
• C)the futures price will be greater than the spot price by an amount equal to the current interest rate times the spot price.
• D)there is no necessary relation between the spot price and the futures price.

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Definitions:

Rolls Forward

A term used in accounting to describe the process of moving figures from one period to the next, often related to budgets or forecasts.

Budgets

Financial plans that outline expected revenues and expenditures for a specific period, guiding spending and investment decisions.

Bottlenecks

Restrictions in a production process that limit throughput, often leading to delays and reduced production efficiency.

Production Budget

A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.