If an investor purchases a futures contract for delivery of a commodity at $15 per unit, when the spot price of the commodity is $12.50 per unit the investor expects the price of the commodity to increase in the future.

Question

Quizplus · Accepted Answer

The investor is willing to pay a premium over the current spot price because they anticipate that the price of the commodity will rise above the contract price by the delivery date, making the purchase profitable.

If an Investor Purchases a Futures Contract for Delivery of a Commodity