answersLogoWhite

0

The principles of forward and futures pricing are based on concepts like arbitrage, cost of carry, and market expectations. Arbitrage ensures that there are no price discrepancies between the spot and futures markets, while the cost of carry accounts for storage, interest, and other holding costs associated with the underlying asset. Additionally, futures prices reflect market expectations regarding future supply and demand conditions. These principles help in determining fair pricing for contracts based on the underlying asset's characteristics and market dynamics.

User Avatar

AnswerBot

2mo ago

What else can I help you with?

Related Questions

What do you mean by future pricing?

Price set in the future.


What is a forward commitment?

A forward contract is legally binding promise to perform some actions in the future . Forward commitments include forward contracts , future contracts and swaps


Is Look forward to working with you into the future correct?

No, not quite. You should say: I look forward to working with you in the future.


What type of planning looks forward to where you want to be in the future?

forward


How can you make sentence for future?

I look to forward to our future meetings.


What is forward beta?

Forward beta, often referred to in finance, represents the expected sensitivity of a stock's future returns to the returns of the market or a benchmark index. It is typically used in the context of capital asset pricing models to estimate the risk of an asset over a specified future period. Unlike historical beta, which is calculated using past data, forward beta incorporates expectations about future performance and market conditions. This measure helps investors assess potential risks and rewards when making investment decisions.


Why do you say looking forward to seeing you and not looking forward to see you?

it is future tense


Where did looking forward to originate and why do they say looking forward and not looking some other direction?

The term originate from the idea of the past, present, and future. When something is taking place in the future, looking forward to, is a way of saying when the future comes. This is so on account of the past being considered behind, the present being here and now, and the future being the forward.


Can an LLC carry forward losses to future tax years?

Yes, an LLC can carry forward losses to future tax years to offset future profits and reduce tax liability.


What does foresighted mean?

Foresighted means to look forward into the future :)


Who determines the pricing of oil commodities?

Commodity traders determine the pricing of oil commodities. They bid on future contract, which are basically agreements to buy or sell oil at a certain date in the future for a price.


Count on us?

Look forward in the future