As Time Draws Closer to Contract Expiration,futures Prices Can Be

question 29

Multiple Choice

As time draws closer to contract expiration,futures prices can be expected to:

• A) increase as the demand for delivery intensifies.
• B) decrease as speculators resolve the uncertainty of prices.
• C) move similarly to broad-based market indices, such as the S&P 500.
• D) converge upon the spot price.

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Definitions:

Fill Orders

The process of completing customer orders by preparing and delivering the requested goods or services.

Manufacturing Cycle Efficiency

A measure of the efficiency of the production process, calculated as the value-added time divided by the total cycle time.

Delivery Performance

A measurement of how well a company can meet its promised delivery times to customers.

Delivery Cycle Time

The total time taken from receipt of a customer order to the delivery of the product or service.