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Author Question: Why must the spot price equal the futures price on the settlement date? What will be an ideal ... (Read 159 times)

Hungry!

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on: Jun 30, 2018
Why must the spot price equal the futures price on the settlement date?
 
  What will be an ideal response?

Question 2

If the Fed buys securities worth 10 million, then
 
  A) bank reserves will increase by 10 million.
  B) bank reserves will decrease by 10 million.
  C) currency in circulation will increase by 10 million.
  D) bank holdings of securities increase by 10 million.


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gstein359

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Reply #1 on: Jun 30, 2018
Answer to Question 1

If there were differences in prices, there would be opportunity for arbitrage.

Answer to Question 2

A


Hungry!

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Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

ultraflyy23

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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