Assume That Speculators Purchased a Futures Contract at the Beginning

question 9

Multiple Choice

Assume that speculators purchased a futures contract at the beginning of the year. If the price of the security represented by the futures contract ____ over the year, then these speculators would likely have purchased the futures contract for ____ than they can sell it for.

• A)increases; more
• B)decreases; less
• C)remains the same; more
• D)increases; less

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Definitions:

Classified Balance Sheet

A financial statement that segregates assets and liabilities into current and non-current categories, providing a detailed snapshot of a company's financial condition.

Closing Entries

Entries recorded at the conclusion of an accounting cycle to shift balances from temporary accounts to permanent ones.

Adjusted Trial Balance

A list of all the accounts and their balances after adjusting entries have been made, used to verify the equality of debits and credits and to prepare financial statements.

Dividends Account

An account used to record the distribution of earnings to shareholders, often in the form of cash or additional shares.