Selling a Currency in a Currency Futures Contract and Profiting

question 44

Multiple Choice

Selling a currency in a currency futures contract and profiting on a decrease in the value of the currency over time is called _____.

• A) hedging
• B) syndicating
• C) a short position
• D) a long position
• E) marked-to-market exchange position

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Definitions:

Pretax Return

The income a company generates before any taxes are subtracted.

Working Capital

The gap between an organization's current assets and its current liabilities, reflecting the business's short-term fiscal stability and operational effectiveness.

Salvage Value

The projected sales value of an asset at the termination of its effective life.

Financially Attractive

Describes opportunities or investments that are likely to provide a good return or prove to be profitable.