Futures contracts have two sources of return namely the capital gains that can be earned when prices move in a favorable fashion, and dividend income from the underlying asset.

Question

Quizplus · Accepted Answer

Futures contracts do not pay dividends, as they are purely speculative vehicles for trading underlying assets at a future date. The only potential source of return comes from changes in the price of the underlying asset.

Futures Contracts Have Two Sources of Return Namely the Capital