The Seller of a Copper Futures Contract Noticed That Her

question 16

Multiple Choice

The seller of a copper futures contract noticed that her account was marked with a $500 gain yesterday.If the standardized contract requires delivery of 25,000 pounds of copper, what happened that day to the price of copper?

• A)The price closed down $0.02 per pound.
• B)The price closed up $0.02 per pound.
• C)The price closed down $0.20 per pound.
• D)The price closed up $0.20 per pound.

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Definitions:

Units Sold

The total quantity of products that a company has sold to its customers during a particular time frame.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, used to cover fixed costs and generate profits.

Gross Margin

Gross Margin is the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It indicates the percentage of revenue that exceeds the cost of goods sold.