At Maturity of a Futures Contract, the Spot Price and Futures

question 88

Multiple Choice

At maturity of a futures contract, the spot price and futures price must be approximately the same because of ________.

• A) marking to market
• B) the convergence property
• C) the open interest
• D) the triple witching hour

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Definitions:

Working Capital

A measure of a company's operational liquidity, calculated as current assets minus current liabilities.

Net Present Value

A financial metric that represents the difference between the present value of cash inflows and outflows over a period of time.

Cash Outflow

Financial transactions that result in the outflow of money from a business, including payments for expenses, investments, and loans.

Cash Inflow

The amount of money being transferred into a business, project, or account, usually from operational, investing, or financing activities.