During the delivery period,
A) the futures price exceeds the price in the cash market.
B) the price in the cash market exceeds the futures price.
C) the futures price and the price in the cash market are equal.
D) there is no discernible relationship between the futures price and the price in the cash market.

Question

Quizplus · Accepted Answer

During the delivery period, the futures price and the price in the cash market converge and are equal. This is because any discrepancy between the two prices would provide an arbitrage opportunity, leading traders to buy low and sell high until the prices align.

During the Delivery Period