easy · FRM Part 1
As a futures contract approaches its delivery date, the futures price converges toward the spot price of the underlying asset.
If at maturity the futures price were significantly higher than the spot price, what would occur?
- The clearinghouse would suspend trading to prevent losses
- Arbitrageurs would buy the spot asset and sell the futures contract
- Arbitrageurs would buy futures and sell the spot asset
- The basis would increase further
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