Suppose You Agree to Purchase One-Ounce of Gold for $382

question 36

Multiple Choice

Suppose you agree to purchase one-ounce of gold for $382 any time over the next month. The current price of gold is $380. The spot price of gold then falls to $377 the next day. If the agreement is represented by a futures contract marking to market on a daily basis as the price changes, what is your cash flow at the end of the business on the next day?

• A) $0.00.
• B) $3.00.
• C) $5.00.
• D) -$3.00.
• E) -$5.00.

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Definitions:

Chronological Age

The amount of time that has passed since an individual's birth, measured in years.

Mental Age

Mental Age is a concept used to describe an individual's cognitive ability level, expressed in terms of the average age at which normal individuals reach a particular level of mental performance.

Nonverbal Intelligence

The ability to understand and interact with others using nonverbal cues such as facial expressions, gestures, and body language, rather than verbal communication.

Intellectually Disabled

A term used to describe individuals with significant limitations in both intellectual functioning and in adaptive behavior, which covers many everyday social and practical skills.