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:

Ratio Scale

A scale of measurement that has a true zero point and equal distances between adjacent units, allowing for meaningful comparison of ratios of scale values.

Variable

A characteristic, number, or quantity that can be measured or quantified and can vary among subjects being observed.

Height

The measurement of an object or person from base to top.

Example

A representative part or a single item from a larger whole or group, especially when used to illustrate or explain a topic.