Which of the Following Is True About Profits from Futures

question 25

Multiple Choice

Which of the following is true about profits from futures contracts?

• A) 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.
• B) It is possible for both the holder of the long position and the holder of the short position to earn a profit.
• C) The clearinghouse makes most of the profit.
• D) The amount that the holder of the long position gains must equal the amount that the holder of the short position loses.
• E) Holders of short positions can recognize profits by making delivery early.

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