A company agrees to buy copper from a seller in Chile at a certain price at the beginning of next year. Both companies sign a contract that locks in a future price at which the trade will take place.?

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Business

Rohan Benson

22 September, 05:54

A company agrees to buy copper from a seller in Chile at a certain price at the beginning of next year. Both companies sign a contract that locks in a future price at which the trade will take place.?

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Madelyn Glass · Answer 1

Answer: The type of market that exist is called a - Futures Market.

Explanation: - Futures market occurs when participants buy and sell commodity and futures contracts for delivery on a specified future date. It can also be referred to as an auction market Examples of futures markets includes New York Mercantile Exchange, the Kansas City Board of Trade, etc.

In its origin, the market started out through open yelling and hand signals usually carried out in a trading pit, but now it has greatly improved and more electronic.

The fundamental of Futures market

Are made in a bid by producers and suppliers of commodities to kick against market volatility. Usually, They negotiate contracts with an investor who takes on both the risk and reward of a volatile market.