Current Selling Price on a Futures Contract Reflects What Investors

question 52

Multiple Choice

Current selling price on a futures contract reflects what investors in the market expect cash prices to be:

• A)at the end of the day.
• B)at the end of the week.
• C)at the end of the month.
• D)at the end of the year.
• E)at the time of delivery.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating an inverse relationship between price and quantity demanded.

Price Maker

A market participant with the power to influence the price of a good or service, typically due to a lack of significant competition, controlling a large portion of the market supply.

Downsloping

Characteristic of a demand curve, indicating that as the price decreases, the quantity demanded increases, assuming all other factors remain constant.

Pure Competition

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to perfect competition.