The Customary Delivery Procedure at the Expiration of a Commodity

question 51

Multiple Choice

The customary delivery procedure at the expiration of a commodity futures contract is:

• A)Delivering the commodity to the futures buyer
• B)Delivering the commodity to the futures exchange
• C)Offsetting the initial futures position and settling in cash
• D)Adding the profit or loss to your margin account and continuing to trade

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Definitions:

Output

The overall production of goods or services by an organization, industry, or economic body.

Economic Profit

The gap between all earnings and total expenditures, factoring in both overt and hidden costs.

Accounting Profit

The total revenue of a business minus the explicit costs associated with that business, as calculated for financial accounting and reporting purposes.

Explicit Costs

Direct, out-of-pocket payments made by businesses for resources and services.