If You Sell in March a Bond Future Contract for 150

question 10

Multiple Choice

If you sell in March a bond future contract for 150 that matures on June 30 of the same year, and on the maturity date the same future sells for 170, you have a ________ of $________.

• A) loss; 20000
• B) loss; 20
• C) profit; 20000
• D) profit; 20

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first sold, used to determine the cost of goods sold and remaining inventory.

Ending Inventory

Ending Inventory is the total value of all inventory, including raw materials, work-in-process, and finished goods, that a company has at the end of an accounting period.

Perpetual Inventory System

A continuously updated system for tracking inventory that adjusts in real-time with each sale or return transaction, maintaining constant, accurate inventory records.

Last-In, First-Out

An inventory valuation method that assumes the most recently produced items are sold first, with costs of the latest inventory purchases used first in determining profitability.