Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 22, Problem 1PS
Summary Introduction
To explain: In details that why there is no availability for Cement Industry in future markets.
Introduction: Future market is a contract to acquire or advertise of the commodities for the future date at a predetermined price.
Expert Solution & Answer
Answer to Problem 1PS
The future marketing of cement has no scope because it cannot be possible to store it for the long term as well as its prices are fixed and knowable.
Explanation of Solution
When the purchasing and selling of commodities are done on a future date at a predetermined price this deal is known as future marketing. Cement has no future market because it cannot be stored for the longest time and required some concern otherwise it will be set and become worthless. Its prices are also set and easily knowable. Its hedging value is also less as well as demand is tentative.
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