The Net Gain or Loss on a Futures Contract for a Stock

question 35

Multiple Choice

The net gain or loss on a futures contract for a stock index that is not closed out is the difference between the futures price when the initial position was created and the futures price at

• A)the settlement date.
• B)the date at which the futures price reaches its maximum.
• C)the date at which the futures price reaches its minimum.
• D)the date three months beyond the date when the initial position was taken.

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Definitions:

Unique Products

Goods that are distinct in nature, offering uncommon features or benefits not typically found in similar items.

Market Demand Curve

The market demand curve represents the total quantity of a good or service that all consumers in a market are willing to purchase at various prices.

Quantity Demanded

Quantity demanded refers to the amount of a good or service consumers are willing and able to purchase at a given price.

Income

The financial gains, typically recurring, from employment or returns on investments.