Question

Explain why a futures contract can be used for either speculation or hedging. 

   Explain why a futures contract can be used for either speculation or hedging.
Options, Futures, and Other Derivatives
Options, Futures, and Other Derivatives
John C. Hull 10th Edition
Chapter 1, Problem 12 ↓

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A futures contract is a standardized legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. These contracts are traded on futures exchanges.  Show more…

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Explain why a futures contract can be used for either speculation or hedging.
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