The Expectations Hypothesis of Futures Pricing

question 34

Multiple Choice

The expectations hypothesis of futures pricing

• A) is the simplest theory of futures pricing.
• B) states that the futures price equals the expected value of the future spot price of the asset.
• C) is not a zero sum game.
• D) a and b.
• E) a and c.

---

Definitions:

Mentally Present

The state of being fully conscious, aware, and focused on the here and now, often emphasized in mindfulness practices.

Decision Making

The cognitive process of choosing a course of action from among multiple alternatives.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often utilized when facing complex problems or incomplete information.

Reasoning

The mental activity of transforming information to reach conclusions.