Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
12. What are the differences between the spot market and the forward/futures markets?
Expert Solution
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Spot markets are markets in which assets are buy and sell on the spot delivery, in future market participants agree to buy or sell an asset at some future date at a particular price.
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- What is the difference between the futures price and the value of the futures contract?arrow_forward2arrow_forwardM3 The terms "contango" and "backwardation" are used to describe term structures of forward/futures prices (i.e., patterns of forward/futures prices of various maturities). Please explain the meanings of these two terms and the situations in which they occur (i.e., the reasons for them). Also, consider futures prices of gold. Do you expect them to be in contango or backwardation? Why?arrow_forward
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