The Short Position in a Futures Contract Is the Party

question 31

Multiple Choice

The short position in a futures contract is the party that will:

• A) deliver a commodity or financial instrument to the buyer at a future date.
• B) suffer the loss.
• C) accept the risk.
• D) benefit from increases in price of the underlying asset.

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Definitions:

Algorithm

A set of rules or procedures for solving a problem in a finite number of steps, often used in computer programming.

Base-Rate Information

Statistical data that indicates the prevalence of a particular phenomenon in a given population.

Categorization-By-Levels

A cognitive process in which objects, ideas, or information are organized into hierarchical categories based on common properties or attributes, simplifying complexity and enhancing understanding.

Categorization-By-Features

The process of organizing objects or concepts into groups based on shared characteristics or attributes.