Futures Contracts Are Said to Exhibit the Property of Convergence

question 54

Multiple Choice

Futures contracts are said to exhibit the property of convergence because ________.

• A) the profits from long positions and short positions must ultimately be equal
• B) the profits from long positions and short positions must ultimately net to zero
• C) price discrepancies would open arbitrage opportunities for investors who spot them
• D) the futures price and spot price of any asset must ultimately net to zero

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Definitions:

Independent

Characterized by autonomy and self-sufficiency, not influenced or controlled by others in matters of opinion, conduct, or dependence.

Verbal Appellation

The act of naming or labeling something or someone using spoken words.

Manipulation

The act of controlling or influencing others in a skillful but often unfair or deceptive way.

Verbal Abuse

The use of words to cause harm to a person, involving insults, threats, or overly critical comments.