On the Day of Delivery

question 65

Multiple Choice

On the day of delivery

• A)the spot price will equal the futures price.
• B)the spot price will be greater than the futures price by an amount equal to the current interest rate times the futures price.
• C)the futures price will be greater than the spot price by an amount equal to the current interest rate times the spot price.
• D)there is no necessary relation between the spot price and the futures price.

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Definitions:

Lower Entropy

A state or condition of decreased disorder or randomness in a system, often associated with increased order or organization.

Oxidation

A chemical reaction involving the loss of electrons or an increase in oxidation state by a molecule, atom, or ion.

Substance

A form of matter that has a specific chemical composition and distinct physical properties.

Electrons

Subatomic particles with a negative charge, found orbiting the nucleus of an atom, involved in chemical bonds and electrical conductivity.