The futures price is mainly a function of the prevailing price of the underlying security plus an expected adjustment in that price by the settlement date.

Question

Quizplus · Accepted Answer

The futures price is determined by the current price of the underlying asset and adjusts based on expectations of what the asset's price will be at the contract's future settlement date, taking into account factors like interest rates and dividends.

The Futures Price Is Mainly a Function of the Prevailing