As an Economic Function of Futures Markets, What Does "Price

question 3

Multiple Choice

As an economic function of futures markets, what does "price discovery" mean?

• A) The futures price and spot price converge over time.
• B) The spot price is a discounted value of the futures price.
• C) The futures price provides information about the expected future spot price.
• D) In equilibrium, the spot price and futures price are equal.

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Definitions:

Paleolithic

Pertaining to the initial phase of the Stone Age, marked by the employment of basic, chipped stone implements by ancient humans.

Mesolithic

The middle part of the Stone Age, between the Paleolithic and Neolithic periods, characterized by the development of smaller stone tools and the beginnings of settled communities.

Osteoarthritis

A degenerative joint disease characterized by the breakdown and eventual loss of cartilage in one or more joints, leading to pain and stiffness.

Domestication

The practice of breeding and raising certain species of animals and plants under controlled conditions to obtain desired traits.