An Oat Futures Contract Is for 5,000 Bushels and the Price

question 66

Multiple Choice

An oat futures contract is for 5,000 bushels and the price can change by as much as 20 cents in either direction per trading day. If the margin requirement is $800 per contract, the maximum gain or loss in one day is

• A) plus or minus 25%.
• B) plus or minus 125%.
• C) plus or minus 1.25%.
• D) plus or minus 80%.

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Definitions:

Average Operating Assets

The average value of those assets used for the normal operation of a company over a specific period, often used in return on investment calculations.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross income.

Residual Income

The income that remains after subtracting all required costs of capital from operating income.

Average Operating Assets

The average value of the assets used in the normal operation of a business to generate revenue, calculated typically over a fiscal year.