Which of the Following Would Result in a Profit on a Euro

question 5

Multiple Choice

Which of the following would result in a profit on a euro futures contract when the euro depreciates?

• A)Buy a euro futures contract; sell a futures contract aFter the euro has depreciated.
• B)Sell a euro futures contract; buy a futures contract aFter the euro has depreciated.
• C)Buy a euro futures contract; buy an additional futures contract aFter the euro has depreciated
• D)None of the above would result in a profit when the euro depreciates.

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Definitions:

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of the business, whichever is longer.

Current Liability

A company's debts or obligations that are due within one year, appearing on the company's balance sheet and including short-term borrowing, accounts payable, and other liabilities.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Expense

is an outflow of cash or other valuable assets from a person or company to another entity, representing the cost of operations or services rendered.