Upper bound on forward settlement price | Finance & Capital Markets | Khan Academy



Upper Bound on Forward Settlement Price. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/lower-bound-on-forward-settlement-price?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/contango-and-backwardation-review?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: In many commodities markets, it is very helpful for buyers or sellers to lock-in future prices. This is what both forwards and futures allow for. This tutorial explains how they work and what the difference is between the two. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Comments

  1. Why isn't this the lower bound? Based on your numbers, this scenario would be more common. If the risk-free rate is 5% and the profit from the arbitrage is also 5% why would market participants assume the risk and expense of the arbitrage if their expected rate of return is no higher than the risk-free rate?
  2. Wow this is great, thanks Khan! Helping me a lot in my investments course.
  3. hi
  4. This is totally awesome... please continue the economics. It is not just knowledge, but survival skills. Thank you for sharing your experience and knowledge! :)


Additional Information:

Visibility: 31665

Duration: 4m 19s

Rating: 23