What Do You Think Are the Advantages of Holding Futures

question 28

Essay

What do you think are the advantages of holding futures rather than the underlying commodity? What do you think are the disadvantages?

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Definitions:

Economic Rent

The price paid for the use of land and other natural resources that are in fixed (perfectly inelastic) supply.

Antipoverty Programs

Governmental or non-profit organization initiatives designed to reduce or eliminate poverty by providing financial assistance, education, or job training.

Productive Capacity

Refers to the maximum output a system, economy, or machine can produce over a period of time under normal conditions.

Supply of Land

The total availability of land resources that can be used for various purposes, often considered perfectly inelastic.