Which best describes a futures contract? Glenna paying $$ \$ 25,000 $$ to her bank in exchange for payments back to her 10 years from now for every month she is alive until or until she reaches 90 years old. An agreement between Ohler Farms to sell it's corn to Fareway for the set price of $$ \$ 110 $$ per bushel (measurement used for amount of corn) Steve and Sarah combining their money to purchase fractions of stock in Apple and Google A loan you give to the city of Hiawatha so they can build a new park. And for the next 6 years they'll pay you $$ 4 \% $$ interest on that loan.

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A futures contract is like Ohler Farms agreeing to sell corn to Fareway at a set price in the future. A futures contract is best described by the second option: "An agreement between Ohler Farms to sell its corn to Fareway for the set price of $$ \$ 110 $$ per bushel (measurement used for amount of corn)." Futures contracts are standardized agreements to buy or sell an asset at a predetermined price at a specified time in the future. In this case, the agreement between Ohler Farms and Fareway to sell corn at a set price fits the definition of a futures contract. The other options describe different financial arrangements, such as annuities, stock purchases, and loans, but not futures contracts.

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