The Relationship of Forwards and Futures Is Best Represented by the Following

question 20

Multiple Choice

The relationship of forwards and futures is best represented by the following statement(s)

• A) If futures price movements and interest rate movements are positively correlated, then futures prices will be higher than forward prices.
• B) If futures price movements and interest rate movements are negatively correlated, then futures prices will be lower than forward prices.
• C) If futures price movements and interest rate movements are uncorrelated, then futures and forward prices will coincide.
• D) All of the above.

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Definitions:

Workers Demanded

Refers to the number of workers that employers are seeking to hire at a given wage and time.

Migration

The movement of people from one place to another for the purpose of settling temporarily or permanently in the new location.

Wage Rate

The amount of compensation a worker receives per unit of time (hourly, weekly, etc.) or per unit of output.