Which of the Following Is False About Profits from Futures

question 63

Multiple Choice

Which of the following is false about profits from futures contracts?I) The person with the long position gets to decide whether to exercise the futures contract and will only do so if there is a profit to be made.II) It is possible for both the holder of the long position and the holder of the short position to earn a profit.III) The clearinghouse makes most of the profit.IV) The amount that the holder of the long position gains must equal the amount that the holder of the short position loses.

• A) I only
• B) II only
• C) III only
• D) IV only
• E) I, II, and III