What are the differences between the spot market and the forward/futures 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: What is the term ei in the single-index model equation ri = E(ri) + βiF + ei? A) the impact of…

A: The single index model shows the relationship between the return and the risk of a security.  It is…

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: What are the pros and cons of using options traded in the over-the-counter market and in an exchange…

A: Options can be defined as those contracts which allow an investor to purchase or sell a security on…

Q: What impact does each of the followingparameters have on the value of a call option?(5) Variability…

A: A call option provides certain rights to an individual regarding purchasing any stock at a strike…

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

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

Q: What is the relationship between option prices and time to expiration, volatility of the underlying…

A: Options are financial instruments  that gives the buyer the right,  to buy or sell the underlying…

Q: Distinguish the forward market from the futures market (included in your answer how counter-party…

A: A futures contract is a standardized financial instrument to either buy or sell an asset at a…

Q: Spot market Futures market Over the counter market Forwards markets

A: Commodity market are very important for determining the prices of commodities.

Q: discuss  the advanatages and disadvantages of options in the financial markets?

A: Advantages: The market is in fluctuation. In these circumstances the seller and buyer should use the…

Q: What are the differences between short and long positions in futures transactions?

A: Futures are derivatives which are used as investment with low capital outflow and also to hedge the…

Q: Which exchange’slisted stocks have the greatest market value?

A: A stock exchange is a centralized venue for buying and selling stocks of publicly traded firms.

Q: Explain the call-put parity relation and how it is justified

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

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: 3.Spot futures parity is an equilibrium condition involving the following variables: A) stock price,…

A: 4. (b) when dealing with derivative market involving optionss 3 (a) stock price, exercise price,…

Q: Answer the following in a couple of sentences  c) Compare and contrast forwards with futures. d)…

A: Forward contract and future contract are good hedging options both are similar but there are some…

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: 2.) In your own words, explain why the index futures is an important class of derivative securities.…

A: Indexed futures are basically the futures listed on the stock exchanges. Futures are derivatives…

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: 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…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.