If You Took a Short Position in Three S&P 500

question 22

Multiple Choice

If you took a short position in three S&P 500 futures contracts at a price of 900 and closed the position when the index futures was 885, you incurred

• A)a gain of $11,250.
• B)a loss of $11,250.
• C)a loss of $8,000.
• D)a gain of $8,000.

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Definitions:

Merchandise Inventories

Goods that a company holds for the purpose of sale in the ordinary course of business, including finished products, work in progress, and raw materials.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Monthly Expenses

Recurring costs or outlays that occur every month, such as rent, utilities, payroll, and other operational charges.

Master Budget

A comprehensive financial plan that includes both operational and financial budgets, representing a company’s overall plan of action for a future period.