Assuming perfect convergence,a spot price will be:
A)greater than the futures price,which has a term to maturity of zero.
B)less than the futures price,which has a term to maturity of zero.
C)the cost of holding a commodity in a futures contract from one time period to another.
D)the price of a commodity in a futures contract,which expires today.

Question

Quizplus · Accepted Answer

In the context of futures contracts, perfect convergence refers to the situation where the futures price and the spot price of the commodity become equal as the futures contract reaches its expiration date. Therefore, the spot price will be the price of a commodity in a futures contract, which expires today.

Assuming Perfect Convergence,a Spot Price Will Be