Many futures contracts specify that there are several grades of a commodity that are acceptable for delivery.

Question

Quizplus · Accepted Answer

This is true, as many futures contracts for commodities have specific grades or standards that must be met for delivery. For example, a futures contract for crude oil may specify a certain API gravity or sulfur content for the oil that is being delivered. This helps to standardize the quality of the commodity being traded and ensures that the buyer receives a product that meets their specifications.

Many Futures Contracts Specify That There Are Several Grades of a Commodity