Chapter 7. Futures Markets Study Notes contain 24 pages covering the following learning objectives:
* Define and describe the key features of a futures contract, including the underlying asset, the contract price and size, trading volume, open interest, delivery, and limits.
* Explain the convergence of futures and spot prices.
* Describe the rationale for margin requirements and explain how they work.
* Describe the role of an exchange in futures and over-the-counter market transactions.
* Identify the differences between a normal and inverted futures market.
* Explain the different market quotes.
* Describe the mechanics of the delivery process and contrast it with cash settlement.
* Evaluate the impact of different trading order types.
* Describe the application of marking to market and hedge accounting for futures.
* Compare and contrast forward and futures contracts.
After reviewing the notes, you will be able to apply what you learned with practice questions.
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