Exercises · Q6
Q.Distinguish between the cash/spot market and the forward/derivatives market.
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Start your 14-day free trial to unlock the full solution →| Basis | Cash/Spot Market | Forward/Derivatives Market |
|---|---|---|
| Delivery/settlement timing | Immediate | At a specified future date |
| Price | Prevailing price at the time of the transaction | Price agreed today, for future settlement |
| Typical instruments | Ordinary shares traded for delivery | Futures, options, forward contracts |
| Value basis | The security's own market value | Value derived from an underlying asset (hence "derivative") |
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