A synthetic for signing a forward contract promising to buy cotton in 6 months includes: Selling...
A synthetic for signing a forward contract promising to buy cotton in 6 months includes:
| Selling cotton today |
| Shorting cotton in the futures market |
| Buying cotton today, and storing it |
A market is in contango when
| Prices are expected to rise |
| The longer the maturity, the higher the Futures price |
| Investors are happy |
| The slope of the futures curve is negative |
A market is in backwardation when
| The slope of the futures curve is negative |
| The prices are expected to drop |
| People are acting strange |
If the storage cost for a commodity becomes increasingly expensive, futures prices also begin to increase.
| True |
| False |
If a stock pays dividends, the higher the dividends, the higher the higher the futures price.
| True |
| False |
When shorting a stock that pays dividend, an investor must pay dividends to the original owner until the stock is returned.
| True |
| False |
Homework Answers
Q1. Option 2
Q2. Option 1. It is when future price is above the expected future
spot price
Q3. Option 2 when price of commodities is trading below the
expected spot price
Q4. True. As the final cost increase
Q5. True. As demand for the stock increases
Q6. True
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A synthetic for signing a forward contract promising to buy
cotton in 6 months includes:
Selling...
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some conclusions and contributes of this paper. I need this for my
Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS
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