Asked by Zeyka Strandzheva on Jul 07, 2024
Verified
Approximately ________ of futures contracts result in actual delivery.
A) 0%
B) less than 1% to 3%
C) less than 5% to 15%
D) less than 60% to 80%
Futures Contracts
Contracts that obligate the purchase or sale of a specific commodity or financial asset at an agreed-upon price at a future date.
Actual Delivery
The physical transfer of a security or commodity from seller to buyer, which finalizes the transaction process.
Result
The outcome or conclusion of a process, experiment, or event, often used to assess performance or effectiveness.
- Perceive the significance and outcomes of the convergence phenomenon in the pricing structure of futures markets.
Verified Answer
TA
Tanaijah AustinJul 09, 2024
Final Answer :
B
Explanation :
The vast majority of futures contracts (over 95%) are settled in cash instead of physically delivering the underlying asset. Therefore, less than 1% to 3% of futures contracts result in actual delivery.
Learning Objectives
- Perceive the significance and outcomes of the convergence phenomenon in the pricing structure of futures markets.