If a Trader Holding a Long Position in Corn Futures

question 9

Multiple Choice

If a trader holding a long position in corn futures fails to meet the obligations of a futures contract, the party that is hurt by the failure is

• A) the offsetting short trader.
• B) the corn farmer.
• C) the clearinghouse.
• D) the broker.
• E) the commodities dealer.

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Definitions:

Ending Inventory

The total value of all unsold goods remaining at the end of an accounting period.

Product B

A placeholder name often used to refer to a secondary product in examples or case studies.

Sales on Account

Transactions where goods or services are sold and payment is deferred, creating accounts receivable.

Merchandise

Goods bought and sold by retailers.