When holding a futures contract long, if you do not want to take delivery of the underlying

Question:

When holding a futures contract long, if you do not want to take delivery of the underlying asset, what transaction must you perform? Explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

An Introduction to Derivative Securities Financial Markets and Risk Management

ISBN: 978-0393913071

1st edition

Authors: Robert A. Jarrow, Arkadev Chatterjee

See More Books

Question Posted: Dec 02, 2015 03:04 AM

See More Questions

The scene is a conference room on the 10th floor of an office building on Wall Street, occupied by Anthes Enterprises, a small, rapidly growing manufacturer of electronic trading systems for...
Solar Power Inc, (SPI) is a public company manufacturing and distributing solar panels. SPI has been in existence for 10 year the last three have been as a public company. To date, the company has...
What do you think would happen if an exchange started trading a contract in which the quality of the underlying asset was incompletely specified?
Glencoe First National Bank operated for years under the assumption that profitability can be increased by increasing dollar volumes. Historically, First Nationals efforts were directed toward...
If research in the management area cannot be 100 percent scientific, why bother to do it at all? Comment on this question.
IAS 17 states that a particular lease which is a finance lease for the lessee need not automatically be a finance lease as regards the lessor. Can this make sense?
Suppose that we want to estimate what percentage of all bearings wears out due to friction within a year of installation. How large a sample will we need to be at least \(90 \%\) confident that the...
Garmen Technologies Inc. operates a small chain of specialty retail stores throughout the U.S. Southwest. The company markets technology-based consumer products both in its stores and over the...
Calculate and report the classification accuracy for the given confusion matrix. 215 0 2 0 5 2 224 0 135 34 0 2 40 211 0 16 368 1 0 12 397 1 0 2 458 0 0 461 3 0 1 20 183 183 30 237 36 219 o 187 419...
The trial balances of Parker and Sargent companies of Exercise 5 for December 31, 2016, are presented as follows: Parker Company continues to use the sophisticated equity method. 1. Prepare all the...
What is the OTC market for trading derivatives? How do OTC markets differ from exchanges?
If you are short a futures contract, why do you not have to borrow the futures contract from a third party to do the short sale?
An incomplete cost of goods manufactured schedule is presented below Instructions Complete the cost of goods manufactured schedule for Hobbit Company. Hobbit Company Cost of Goods Manufactured...
Every molecule of a nonrenewable resource used today precludes its use by future generations. Therefore, the only morally defensible policy for any generation is to use only renewable resources....
Consider a possible mechanism for controlling population. According to an idea first put forth by Kenneth Boulding (1964) each individual would be given the right to produce one (and only one!)...
Over the last several decades in product liability law, there has been a movement in the court system from caveat emptor (buyer beware) to caveat venditor (seller beware). The liability for using and...
Which point of view in Debate 1.2 do you find most compelling? Why? What logic or evidence do you find most supportive of that position? Debate 1. 2 DEBATE 1.2 What Does the Future Hold? Is the...
Positive and negative feedback loops lie at the core of systematic thinking about the future. As you examine the key forces shaping the future, what examples of positive and negative feedback loops...
In Exercises 7792, use the graph to determine a. The functions domain; b. The functions range; c. The x-intercepts, if any;d. The y-intercept, if any; e. The missing function values, indicated by...
Suppose that a company has 10.000 outstanding shares in the beginning of the year. On April 1st, the company increases its shares by 6.000. On July 1st, the company increases its shares again, but...
What bank regulation is designed to reduce adverse selection problems for deposit insurance? Will it always work?
What bank regulations are designed to reduce moral hazard problems created by deposit insurance? Will they completely eliminate the moral hazard problem?
Why did the S&L crisis not occur until the 1980s?
What are the vulnerabilities of embedded operating systems, such as, but not limited to, IoT devices, programmable logic devices, and vehicle control systems.
Factor the polynomial completely. 7x-17x-12
What are some relevant recommendations about Coca-Cola's Planning, Design, and Implementation of an Enterprise Resource Planning System that other companies can apply to their own initiatives?

When holding a futures contract long, if you do not want to take delivery of the underlying

Question:

Step by Step Answer:

A delivery can happen during the delivery period which is typically during the las...View the full answer

An Introduction to Derivative Securities Financial Markets and Risk Management

Students also viewed these Banking questions