Chapter Objectives

Explain how commodities and financial futures can be used for speculation or for hedging.
Describe the different types of commodities and financial futures contracts that are available.
Explain how margin is used in the futures markets to magnify gains (or losses).
Explain the difference between the cash and the futures markets.
Describe how currency futures and interest rate futures are currently utilized in a business environment.
Explain the role of interest rate swaps as an alternative to futures.

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