Midge Feels That the Price of Gold Is Going to Fall

question 17

Multiple Choice

Midge feels that the price of gold is going to fall because inflation is on the decline. To profit from her prediction, assuming she is correct, Midge should

• A) sell short one futures contract and offset it by buying an equivalent long futures contract.
• B) buy gold bullion today and then sell an equivalent amount of gold futures.
• C) buy a gold futures contract today.
• D) sell short a futures contract today.

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Definitions:

Synesthesia

A phenomenon where a single sense is experienced as though it were being perceived by multiple senses, for example, visualizing sounds.

Clairvoyance

The supposed ability to gain information about an object, person, location, or physical event through extrasensory perception, beyond the known human senses.

Precognition

The knowledge of an event before it happens, often considered as a type of extrasensory perception.

Telepathy

The alleged exchange of information between individuals without utilizing any established human senses or physical interaction.