What Happens to the Price of a Futures Contract as Expiration

question 70

Multiple Choice

What happens to the price of a futures contract as expiration draws closer?

• A) The futures price exceeds the spot price of the asset.
• B) The futures price is exceeded by the spot price of the asset.
• C) The futures price approaches the spot price of the asset.
• D) There is no relationship between the futures price and spot price as the contract approaches expiration.

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Definitions:

Political Challenges

Issues, obstacles, or conflicts that arise in the context of governance, policy-making, or public administration that require strategic resolution.

Ethical Challenges

Situations or dilemmas that require individuals or organizations to choose actions that are morally right but may conflict with personal or societal norms.

Uncertainty-Avoidance

A cultural dimension that describes the extent to which people in a society attempt to cope with anxiety by minimizing uncertainty.

Situational Uncertainties

Unknown or unpredictable aspects of environments that can impact decision-making and strategies.