The fact that as the due date approaches, the futures price gets closer to the spot price is which of these?
A)money illusion
B)a market anomaly
C)the liquidity premium
D)convergence

Question

Quizplus · Accepted Answer

This phenomenon is known as convergence, where the futures price and spot price converge as the due date approaches. It is a normal occurrence in futures markets and helps to ensure that futures prices accurately reflect the underlying spot prices.

The Fact That as the Due Date Approaches, the Futures