In Regards to a Futures Contract, Which of the Below

question 25

Multiple Choice

In regards to a futures contract, which of the below statements is FALSE?

• A) When entering into a futures contract, the parties to the contract agree to buy or sell a specific amount of a specific item at a specified future date.
• B) The price at which the parties agree to transact in the future is called the futures price.
• C) The designated date at which the parties must transact is called the settlement date or delivery date.
• D) When an investor takes a position in the market by buying a futures contract (or agreeing to buy at the future date), the investor is said to be in a short position or to be short futures.

---

Definitions:

Total Income

The sum of all earnings obtained from work, investments, and other sources before any deductions.

Total Taxes

The combined amount of all taxes levied by a government on individuals, corporations, and other entities.

Tax Rate Structure

The organization of tax rates into different brackets or categories, which determines the amount of tax levied on income, property, sales, etc.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, placing a higher burden on wealthier individuals.