What do you mean by convergence? Discuss applications convergence in d

Question

What do you mean by convergence? Discuss applications convergence in detail.

30 Aug 2022

Answer :

Word Count : 441

Convergence is the movement of the price of a futures contract toward the spot price of the underlying cash commodity as the delivery date approaches.

Convergence is the movement in the price of a futures contract toward the spot or cash price of the underlying commodity over time.

The price of the futures contract and the spot price will be roughly equal on the delivery date.

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