Reference no: EM132235843
Question: Futures Contracts
Resources
• Discussion Participation Scoring Guide.
Four factors affect the value of a futures contract on a stock index-three of which are:
• The current price of the stock index.
• The time remaining until the contract maturity date.
• The dividends of the stock index.
Identify the fourth factor, and explain how and why changes in this factor affect the value of the futures contract.
Note: This is a CFA Exam Level 2 question.
Response Guidelines
Review the posts of at least two other learners and answer the following questions, providing explanations as needed:
• How does the interest rate environment impact the futures market?
• Is the futures market isolated from essential time value of money elements?
• Would the same elements that affect futures markets impact derivatives markets also?