In the Absence of Arbitrage,the Futures Price at Maturity Should

question 17

Multiple Choice

In the absence of arbitrage,the futures price at maturity should equal

• A)The price at inception plus interest on the margin account for the period of the contract.
• B)The spot price of the underlying asset at that point.
• C)The price at inception plus the storage cost for the asset over the contract period.
• D)The price of the underlying asset minus a convenience yield.

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Definitions:

Sixth Amendment

A provision of the U.S. Constitution that guarantees individuals the rights to a speedy trial, an impartial jury, to be informed of the charges against them, to confront witnesses, to have compulsory process for obtaining witnesses, and to have the assistance of counsel for their defense.

Speedy and Public Trial

A constitutional right guaranteed under the Sixth Amendment ensuring criminal defendants are tried without undue delay and in a public setting.

Due Process Clause

A clause in the Fifth Amendment of the U.S. Constitution which provides that the government cannot deprive an individual of life, liberty, or property without a fair and just hearing.

Entrapment Defense

A legal defense claiming the defendant was induced by law enforcement to commit a crime they otherwise would not have committed.