Forward and Futures Prices Will Be Equal Prior to Expiration

question 42

True/False

Forward and futures prices will be equal prior to expiration if interest rates are certain or if futures prices and interest rates are correlated.

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Definitions:

Seasonal Goods

Seasonal goods are products that are in high demand during specific times of the year, such as holiday decorations, winter clothing, or summer fruits.

Retailer

A business entity that sells goods or services directly to consumers, usually in small quantities.

Wholesaler

An entity in the distribution channel that buys goods in large quantities from manufacturers or importers and sells them to retailers or other businesses.

Material Terms

Essential conditions and stipulations within a contract that are significant to the agreement and affect its execution or enforcement.