Futures markets are often good predictors of what will happen to the price of goods in the future because:
A) speculators typically have better information than consumers.
B) the markets are more complete.
C) speculators have an incentive to "get it right" because their own money is on the line.
D) the markets are highly regulated.

Question

Quizplus · Accepted Answer

Speculators in futures markets have a financial incentive to accurately predict future prices, as their own money is at risk. This motivates them to gather and analyze information effectively to make informed predictions.

Futures Markets Are Often Good Predictors of What Will Happen