A riskless arbitrage can be done through both, financial asset and nonfinancial asset.
Derivatives MCQ - Derivatives Section 1
Both forward and futures contracts are used for hedging and speculation
purposes. Futures are marked to market every day and are standardized,
whereas forward contracts are customized and are settled at expiry (there
is no mark-to-market in between).
The implied volatility represents the risk of the underlying. So an increase
in the implied volatility on equity market index options indicates that the
market uncertainty has gone up.
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The spot price of an asset that has no interim costs or benefits will be least
likely affected by:
The price recently paid by other investors is past information and does not
affect the spot price.
