The Forward Price of an Asset That Has No Holding

question 24

Multiple Choice

The forward price of an asset that has no holding costs or benefits is equal to

• A)The compounded price of the spot asset,where the compounding takes place at the risk-free rate.
• B)The compounded price of the spot asset,where the compounding takes place at a rate equal to the expected return on the asset.
• C)The market's expectation of the future spot price of the asset.
• D)Its current spot price.

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Definitions:

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance that is essential for most forms of life and is known chemically as H2O.

Flagellated Sperm

Sperm cells equipped with a flagellum, allowing for motility in fluid environments, commonly found in many plants and some animals.

Bryophytes

Non-vascular plants that include mosses, liverworts, and hornworts, characterized by their life cycles and lack of true roots and leaves.

Sporophytes

The diploid, spore-producing phase in the life cycle of plants that undergo alternation of generations.