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PRMIA Exam 8006 Topic 2 Question 55 Discussion

Actual exam question for PRMIA's Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition exam
Question #: 55
Topic #: 2
[All Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition Questions]

The quote for which of the following methods of physical delivery of a futures contract would be the cheapest?

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Suggested Answer: C

'In store' delivery is for delivery in a standardized location, and the buyer is handed a 'warrant' that allows him to pick the goods up. This is the cheapest means of physical delivery. The other prices will be higher as they involve more costs for the seller who has to get the goods on board a ship, or to the docks, or insurance and freight as well. Choice 'c' is the correct answer.


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