What are Futures? Explain the process of price adjustments of futures when dividend or bonus shares are paid out. 

Futures are financial contracts that obligate the parties involved to buy or sell a specified asset at a future date and at a predetermined price. Futures are commonly used as a hedging tool by businesses and investors to manage price risk associated with commodities, currencies, interest rates, and stock indices. Futures contracts are standardized, exchange-traded contracts that have a fixed expiration date and settlement price.

Price adjustments of futures when dividends or bonus shares are paid out are an important consideration for futures traders and investors. Dividends and bonus shares can affect the underlying stock price, which in turn can impact the price of the futures contract. In order to maintain a fair and accurate pricing mechanism for futures contracts, futures exchanges have developed specific rules for adjusting futures prices when dividends or bonus shares are paid out.

Dividend Adjustments for Futures:

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