In forward contracts, the amount of money above and beyond the futures price is known as:
A)terra.
B)annuity.
C)covenant.
D)alle.
E)basis.

Question

Quizplus · Accepted Answer

In forward contracts, the term "basis" refers to the difference between the spot price of an asset and the futures price of the same asset. It is not the amount of money above the futures price, but rather the difference between the spot price and the futures price, which can be positive or negative.

In Forward Contracts, the Amount of Money Above and Beyond