The Customary Delivery Procedure at the Expiration of a Commodity

question 4

Multiple Choice

The customary delivery procedure at the expiration of a commodity futures contract is:

• A) delivering the commodity to the futures buyer.
• B) delivering the commodity to the futures exchange.
• C) offsetting the initial futures position and settling in cash.
• D)adding the profit or loss to your margin account and continuing to trade.

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Definitions:

Short Run

In microeconomics, a period of time in which producers are able to change the quantities of some but not all of the resources they employ; a period in which some resources (usually plant) are fixed and some are variable.

Profits

The financial gain realized when the revenue generated from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Long Run

In microeconomics, a period of time long enough to enable producers of a product to change the quantities of all the resources they employ, so that all resources and costs are variable and no resources or costs are fixed.

Production Plant

A facility or set of facilities where goods are manufactured or assembled primarily from raw materials.