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Hence the counterparty risk is a relevant aspect for the contract maturing at T provided that (mathbb {P} tau leq T >0) where τ:=τ h ∧τ c is the moment of the first default.
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When the contract matures, the asset is exchanged; in this case, the farmer sells the grain to the wholesaler at the forward rate ($12,000).
When those contracts mature, they either settle them with a cash payment or sell them on to genuine consumers.
Cathay emphasised in yesterday's Stock Exchange statement predicting "disappointing" full-year financial results that future fluctuations in the oil price could ameliorate the as-yet unrealised hedging losses, and also that such losses are accounted for in a single financial year, rather than spread over the full period in which the contracts mature.
However, most investors offset their positions before their contracts mature instead of accepting or delivering physical gold.
The length of these contracts is for a period of about 10 months, and a contract for "September wheat" or "September soybean" indicates the month the contract matures.
The cash value, which is less than the face value of the policy, is paid to the policyholder when the contract matures or is surrendered.
Most whole life contracts also accumulate a cash value that is paid when the contract matures or is surrendered; the cash value is less than the policy's face value.
If sterling is devalued before the forward contract matures, the operator will get a foreign currency—say the franc at the old rate and can rebuy sterling at a cheaper rate.
In efficient markets, futures prices are an unbiased estimator of spot prices when the future contract matures (Gardner 1976; Liang et al. 2011).
When the derivatives contract matures and the corresponding resources are delivered, the broker can then sell the resources to clients who need to use them: in this context, the broker is using the derivatives as a mechanism for hedging risk in the uncertainty over future demand and supply.
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