Assuming a Futures Contract Is Correctly Price, According to the Spot-Futures

question 120

Multiple Choice

Assuming a futures contract is correctly price, according to the spot-futures parity relationship, an increase in the risk-free rate of interest will:

• A) increase the futures price.
• B) decrease the futures price.
• C) not change any futures price.
• D) increase commodity futures prices but not financial futures prices.
• E) increase financial futures prices but not commodity futures prices.

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