Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. for which one of the two parties involved in a for

For which one of the two parties involved in a forward commitment through a forward contract...

50.1K

Verified Solution

Question

Finance

For which one of the two parties involved in a forwardcommitment through a forward contract or a futures contract; arethe following market conditions (occurring after inception of thecontract) profitable? Explain each in 2 lines:

A. Scarcity of the underlying?

B. Sharp increase in spot price of the underlying?

C. Sharp decrease in spot price of the underlying?

D. Severe inflation?

Answer & Explanation Solved by verified expert
4.3 Ratings (947 Votes)
The two positions involved in a forward or futures contract is the long position which is the buyer position buying the underlying and the short position which is the seller selling the underlying asset in the contract A Scarcity of underlying Scarcity of underlying implies that the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

For which one of the two parties involved in a forwardcommitment through a forward contract or a futures contract; arethe following market conditions (occurring after inception of thecontract) profitable? Explain each in 2 lines:A. Scarcity of the underlying?B. Sharp increase in spot price of the underlying?C. Sharp decrease in spot price of the underlying?D. Severe inflation?

Other questions asked by students

Q

Mathematics real analysis(please follow the comment) Theorem: There exists a unique positive real number a is in...

Advance Math
Q

Managing other consultants on a project is one of the key and daunting tasks of construction...

Civil Engineering
Q

Read Proposition 1.23, the paragraph between the proposition and its proof, and the proof. a. In your...

Advance Math
Q

Describe the role of business research in promoting continuous improvement in health care organizations. Discuss the...

General Management
Q

Find the equation of the line which has slope 10 and y intercept 5 Give...

Calculus
Q

The common stock of Bonita Inc. is currently selling at $121 per share....

Accounting
Q

Las acciones en circulacin de Larson Corporation incluan 40,000 acciones ordinarias a la par de...

Accounting
Q

Exercise 5-21(Algo) Price of a bond [LO5-9,5-10] On September 30,2024, the Techno Corporation...

Accounting
Q

QUESTION 2: UNDERSTANDING THE INTERNAL CONTROL PROCESS, ASSESSING CONTROL RISK AND INVENTORY MANAGEMENT SYSTEM OF...

Accounting
Q

You wote wataforma aber and mushroom. You go to the maintending to purchase one wyaf...

Accounting
Q

The following selected transactions relate to liabilities of Interstate Farm Implements for December of 2013....

Accounting
Q

Lee Tanaka spent 225 hours in the tax year marketing garden tools by a partnership...

Accounting