Open Yale CoursesECON 252: Financial MarketsLecture 22 - Stock Index, Oil and Other Futures Markets<< previous session| next session >>Overview:Futures markets have expanded far beyond their initial application to farmer's planting and harvest cycles.These markets now allow investors and traders to set prices for a broad spectrum of assets and for a wholeterm structure stretching into the distant future. Some of these markets are often priced according to simplefair-value formulae, others are not. Futures markets can be in backwardation, where the future price is lowerthan the present, spot price. They can also be in contango, where the price rises with maturity and is higher inthe future than it is today. The S&P/Case-Shiller Home Price Index is a recent invention that has transferred
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