You Hold One Long Oil Futures Contract That Expires in April.To

question 53

Multiple Choice

You hold one long oil futures contract that expires in April.To close your position in oil futures before the delivery date, you must

• A)buy one May oil futures contract.
• B)buy two April oil futures contracts.
• C)sell one April oil futures contract.
• D)sell one May oil futures contract.

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Definitions:

Maximize Profits

A strategy or goal where a firm or individual seeks to achieve the highest possible profit from its operations.

Peak Efficiency

The state of operation in which a system or process achieves its maximum output with the lowest input, often ideal in terms of productivity.

Perfectly Competitive Firm

A company that operates in a market where there are many sellers and buyers, the product is homogeneous, and there is free entry and exit from the market.

MR (Marginal Revenue)

The surplus income obtained by selling an extra unit of a product or service.