You Have Taken a Short Position in a Futures Contract

question 61

Multiple Choice

You have taken a short position in a futures contract on corn at £2.60 per bushel.Over the next 5 days the contract settled at 2.52, 2.57, 2.62, 2.68, 2.70.Before you can reverse your position in the
Futures market on the fifth day you are notified to accept delivery.What will you receive on delivery
And what is the net amount you receive in total?

• A)£2.60; £-0.10
• B)£2.60; £0.10
• C)£2.60; £2.70
• D)£2.70; £-0.10
• E)£2.70; £2.60

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Definitions:

Profit

The financial gain achieved when the amount of revenue gained from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Unrealised

Refers to profits or losses that have occurred on paper due to changes in value but have not been realized through an actual transaction.

Consolidation

The process of combining the financial statements of separate but related entities to present as those of a single economic entity.

NCI

Non-Controlling Interest, a minority shareholding in a subsidiary not owned by the parent company, reflecting those shareholders' claim on assets and earnings.