You Have Taken a Short Position in a Futures Contract

question 52

Multiple Choice

You have taken a short position in a futures contract on corn at $2.60 per bushel. Over the next 5 days the contract settled at 2.52,2.57,2.62,2.68,and 2.70. You then decide to reverse your position in the futures market on the fifth day at close. What is the net amount you receive at the end of 5 days?

• A) $0.00
• B) $2.60
• C) $2.70
• D) $2.80
• E) Must know the number of contracts

Recognize the significance of markets as institutions for exchange.

Understand the concept of wealth accumulation through saving and inheritance.

Comprehend how employment by government entities fits into the broader economic context.

Understand the legal principles of contract performance, including tender of performance and legal payment methods.

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Definitions:

Domestic Use

Refers to the consumption of resources, such as water or energy, within a household for daily activities such as drinking, cooking, heating, and bathing.

Groundwater Flow

The movement of groundwater through the Earth's subsurface, driven by gravity and differences in pressure.

Subsurface Material

Materials found beneath the Earth's surface, including rocks, minerals, and soil.

Groundwater Velocity

The speed at which groundwater moves through an aquifer, influenced by the permeability of the rock and the hydraulic gradient.