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:

Creative Destruction

The hypothesis that the creation of new products and production methods destroys the market power of existing monopolies.

Dominant Firms

Companies that have a major share of sales in a specific market, significantly influencing that market's dynamics.

New Firms

Newly established businesses entering the market, often bringing innovation or increasing competition in their industry segment.

Creative Destruction

A concept in economics where new innovation leads to the obliteration of older industries or ways of doing things, driving economic development.