Open interest in currency futures contracts
A)tends to be greatest for the near-term contracts.
B)tends to be greatest for the longer-term contracts.
C)typically decreases with the term to maturity of most futures contracts.
D)tends to be greatest for the near-term contracts,and typically decreases with the term to maturity of most futures contracts.

Question

Quizplus · Accepted Answer

Open interest refers to the total number of outstanding futures contracts that are yet to be closed or expire. Generally, open interest tends to be highest for near-term contracts as these are the contracts that are closest to expiration and therefore have the most liquidity. However, open interest also typically decreases with the term to maturity of most futures contracts. Therefore, choice D is the correct answer.

Open Interest in Currency Futures Contracts