Thus, if a gain is made on the futures contracts the investor can deposit the The quest for arbitrage profits links interest rates and futures prices so that, if the term structure of interest rates does not fluctuate wildly, changes in the futures contract price tend to be correlated with observed three-month interest rates. The clearing house then selects (at random or according to a previously determined rule) an investor - say, B - with a long position in the same contract to accept delivery. Gucci Small French Wallet. Because the increment in wealth could be immediately consumed, providing an increment to maximized utility equal to the marginal utility of consumption. Gucci Flats Bow. In practice, therefore, models of futures prices based on (15.12) explore indirect proxy measures for the impact of c and y rather than attempting to construct immediate empirical counterparts for them. Gucci Small French Wallet. Though bonds also differ in the likelihood that the issuer will default on the obligations stipulated in the bond's indenture, the prospect of default has been ignored in this chapter. Gucci Thong Horsebit. In view of the reservations outlined above, however, theories of the term structure that allow for risk-averse decision makers are, at the very least, worthy of consideration. Gucci Small French Wallet. All that is needed is to assume that investors could, in principle, create them by holding the appropriate portfolios of assets that do exist.