As Time Draws Closer to Contract Expiration, Futures Contract Prices

question 42

Multiple Choice

As time draws closer to contract expiration, futures contract prices can be expected to:

• A) increase as the demand for delivery intensifies.
• B) decrease as speculators resolve the uncertainty of prices.
• C) move similarly to broad-based market indices, such as the S&P 500.
• D)converge upon the spot price.

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Definitions:

Statement of Owners' Equity

A financial document detailing the changes in ownership interest, including investments and withdrawals, over a period.

Public Company Accounting Oversight Board

A regulatory body established by Congress to oversee the audits of public companies, with the aim of protecting investors and the public interest by ensuring informative, accurate, and independent audit reports.

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws, regulating the securities industry, and ensuring market integrity.