Why Is the Initial Value of a Futures Contract Zero

question 48

Multiple Choice

Why is the initial value of a futures contract zero?

• A)the futures is immediately marked-to-market
• B)you do not pay anything for it
• C)the basis will converge to zero
• D)the expected profit is zero
• E)none of the above

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Definitions:

Evolutionary Theories

Concepts and principles aiming to explain the origins, changes, and diversities of life on Earth through mechanisms such as natural selection and genetic drift.

Subcortical Brain Structures

Regions located beneath the cerebral cortex involved in various functions, including emotion, reward processing, and movement regulation.

Innate Emotions

Basic feelings or emotions that are hard-wired into the brain at birth through evolution.

James-Lange Theory

An early theory of emotion that proposes emotions occur as a result of physiological reactions to events.