Convergence simply means that, on the last day that a futures contract can be delivered to fulfill the terms of the contract, the price of the futures and the price of the underlying commodity will be equal. The two prices must converge. If not, there is an opportunity for arbitrage and ...
Future and forward contracts (more commonly referred to as futures and forwards) are contracts that are used by businesses and investors tohedgeagainst risks or speculate. Futures and forwards are examples of derivative assets that derive their values from underlying assets. Both contracts rely on lo...
An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash. Alternative investments can include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities...
It's possible to directly own these assets or, again, invest in a fund that manages the alternative investments for you. How to Build an Investment Portfolio A critical component of any investment portfolio is diversification. You don't want to put all of your eggs in one basket. If th...
These seven types of investments can add portfolio stability without sacrificing return. Kate StalterFeb. 3, 2025 The Best Copper ETFs to Buy ETFs offer easier access to the commodity compared to futures contracts. Matt WhittakerJan. 31, 2025 ...
Forward Market vs Futures Market Forward market and future market are two places where the traders and investors try their luck. However, before one invests in either of them, they must be aware of both these types of markets to know the benefits they may expect and the risks that they mig...
to change the price they are charging for electricity. This rate case may include a request to raise rates high enough to recover the prudent and useful cost of investments made in various transmission projects (including a return on such investments if recovery is spread over future years). Ne...
A tutorial that explains concisely the present value and future value of annuities, which is a series of regular, equal payments, that can be used to compare investments, loans, and mortgages; how to calculate net present value; includes formulas and exa
Some Derivative Securities examples are forward, futures contracts, options contracts, and credit default swaps. 4. Hybrid securities Securities that incorporate at least two different Financial Securities are known as Hybrid Securities or hybrids. A convertible bond, which includes traits of a standard...
Financial markets facilitate the flow of savings and investments, enabling capital formation and economic growth. Risk Management: It offers tools and instruments that help manage and mitigate risks. For example, derivatives such as options and futures enable investors to hedge against price fluctuations...