Futures Contracts Trade with Every Month as a Delivery Month

question 17

Multiple Choice

Futures contracts trade with every month as a delivery month.A company is hedging the purchase of the underlying asset on June 15.Which futures contract should it use?

• A) The June contract
• B) The July contract
• C) The May contract
• D) The August contract

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Definitions:

Exemption Clause

A contract term that attempts to limit or exclude one party's liability for certain eventualities or damages.

Deliverable State

A condition referring to the readiness or suitability of a product or property to be handed over or delivered as per an agreement.

Standard-Sized Cupboards

Standard-sized cupboards refer to storage units with dimensions that adhere to commonly accepted measurements for such furniture, facilitating compatibility and uniformity in spaces.

Lien

A claim registered against property, such as a mortgage; a charge giving the creditor the right to retain what is in her possession until her demands for payment are satisfied.