Description
The futures price is a linear function of the underlying asset price. That is, if we draw the graph of the futures price against the price of the underlying we obtain a straight line. But non-linear functions, which have graphs that are not straight lines, are also used in every branch of finance. For instance, the price of a bond is a non-linear function of its yield.
doc_667971918.pdf
The futures price is a linear function of the underlying asset price. That is, if we draw the graph of the futures price against the price of the underlying we obtain a straight line. But non-linear functions, which have graphs that are not straight lines, are also used in every branch of finance. For instance, the price of a bond is a non-linear function of its yield.
doc_667971918.pdf