In a futures contract, the futures price is
A) determined by the buyer and the seller when the delivery of the commodity takes place.
B) determined by the futures exchange.
C) determined by the buyer and the seller when they initiate the contract.
D) determined independently by the provider of the underlying asset.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

The futures price in a futures contract is determined by the buyer and the seller when they initiate the contract, based on their expectations of future price movements of the underlying asset.

In a Futures Contract, the Futures Price Is