Which of the following is true of the market price of a futures contract over time?
A)It is set at time 0.
B)It is fixed over the life of the contract.
C)It changes based on the market value of the underlying asset.
D)It decreases with time to expiration.
E)It is based on supply and demand.

Question

Quizplus · Accepted Answer

The market price of a futures contract changes based on the market value of the underlying asset, as it reflects the expected future price of that asset.

Which of the Following Is True of the Market Price