In Regards to a Futures Contract, Which of the Below

question 16

Multiple Choice

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

• A) The buyer of a futures contract will realize a profit if the futures price decreases; the seller of a futures contract will realize a profit if the futures price increases.
• B) 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 long position or to be long futures.
• C) The "something" that the parties agree to exchange is called the underlying.
• D) None of these

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Definitions:

Price-Support Payments

Government subsidies provided to farmers or producers to maintain the market price of an agricultural product above its competitive equilibrium level.

Family Farm

A farm owned and operated by a family, typically passed down through generations, as opposed to corporate farms owned by companies.

Great Depression

A severe worldwide economic downturn that lasted from 1929 until the early 1940s, marked by massive unemployment and deflation.

1933

A pivotal year during the Great Depression characterized by significant banking crises and the implementation of New Deal policies by President Franklin D. Roosevelt in the United States.