Spot market Futures market Over the counter market Forwards markets

Q: What is the Futures and Options Market? What are the features? Provide information about the Futures…

A: Futures contract is a legal contract which is standardized in nature. The contract is used by market…

Q: Explain the difference between a call option and a long position in a futures contract.

A: Both the options and futures are derivative contracts.

Q: exaplain how the following assist in hedging when the currency depreciates forwards Futures…

A: Forward contracts- Currency forward contracts, are an agreement to exchange certain amounts of…

Q: Are futures prices always greater than the current spot price? Explain

A: The contango hypothesis battles that the purchasers of the items are the natural hedgers since they…

Q: Distinguish between (2) spot and futures markets

A: A financial market is the market where financial assets are created and traded. Financial assets are…

Q: The market that deals in futures and options is called O a Over-the-counter market Ob. Derivatives…

A: Financial markets are the markets that play the role of intermediaries between the buyers and…

Q: e in fin

A: Long hedge in financial futures : A long hedge can be understood as the futures position taken for…

Q: What are the differences between the spot market and the forward/futures markets?

A: Spot markets are markets in which assets are buy and sell on the spot delivery, in future market…

Q: Explain how a company can use the futures market to hedge against rising rawmaterials prices.

A: Answer: If the price of key raw materials is rising, then a company can hedge against the risk by…

Q: What is the spread (i.e., difference) between futures price and spot price called? a) Convergence…

A: The futures price is an estimated price the investor expected in the future.  The spot price is a…

Q: Q19: Using Futures contract to transfer price risk is called     diversifying.     hedging…

A: Derivative contract can be used for hedging, speculation and arbitrage

Q: What is derivatives market? Cite an example.

A: Before knowing the derivative market, let us know about the derivatives :  The instruments which…

Q: How do transaction costs affect the ability of forward and futures markets to arbitrage profits?

A: Both future and the forward contract involve the execution of the transaction at a future date at a…

Q: Briefly explain the following 1. Spot market vs futures market

A: There are two market spot market and future markets.

Q: What is margin requirement (for futures)?

A: Solution:- A Margin Requirement is the share of marginable securities that an investor should pay…

Q: Describe how commodity futures markets can beused to reduce input price risk.

A: The futures are the types of financial derivatives in which two parties entered into a contract to…

Q: Explain how the futures markets can be used to reduce interest rate and input price risk.

A: A contract in which a seller & a buyer has an obligation to sell or buy an asset for a…

Q: Forwards and Futures: How are forwards and futures similar? How are they different? Briefly explain…

A: A forward contract is referred to the customized contract, which is between the two parties for…

Q: Option co Futures co

A: A derivative contract is a contract between two parties which is made on underlying asset at a…

Q: What is futures market?

A: A market where both buyer and seller interact in order to buy and selling of futures contracts and…

Q: Spot vs. Futures prices Briefly explain the following: a. Basis b. Contango c. Backwardation

A: Spot price: The current price of a security at which it can be bought or sold at a specific location…

Q: 11.) Define Futures Contracts, and Options. How are these products commonly used as portfolio…

A: Derivatives include forwards, futures, options contracts, and swaps.

Q: Define commodity futures

A: Futures are a type of derivative contract that creates an obligation between parties to transact an…

Q: What’s the difference between spot markets and futures markets?

A: Introduction: Spot market can be defined as a over the counter market which involves trading of…

Q: What is an efficient market and why is it important for derivatives markets?

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: What are advantages of futures options over spot options?

A: Futures: The contract to buy or sell assets at predefined prices but will be paid and delivered…

Q: Compare and contrast the Spot market versus the Future market give examples

A: Spot market is the market where exchange and settlement of the transaction is immediate. examples of…

Q: the difference in the manner that futures and options modify portfolio riks

A: Future contracts are those whose value is determined by the underlying assets. These contracts are…