On the expiration date of the futures contract, the price of the contract
At expiry, a futures contract's price converges with the price of the underlying asset. Otherwise, buying in the cheaper market and selling in the dearer market would…
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On the expiration date of the futures contract, the price of the contract
Answer and explanation
Correct answer C
At expiry, a futures contract's price converges with the price of the underlying asset. Otherwise, buying in the cheaper market and selling in the dearer market would provide an arbitrage opportunity.
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Karnataka SET (KSET)