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Question
State one difference between spot market and future market.
Distinguish Between
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Solution 1
| Spot Market | Future Market |
| This is a market where goods are physically transferred from sellers to buyers. | This is a market where buyers and sellers enter into future contracts without the intention of actual delivery of goods. Their purpose is to profit from fluctuations in prices. |
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Solution 2
| Basis of Distinction | Spot Market | Futures Market |
| Nature of contract | Contract for purchase and sale | Contract for speculation |
| Delivery | Product actually delivered | No delivery but settlement by payment of difference in prices |
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