A Gasoline Distributor Buys a Gasoline Futures Contract That Requires

question 54

Multiple Choice

A gasoline distributor buys a gasoline futures contract that requires acceptance of 42,000 gallons of gasoline at $2.94 per gallon. How is the account marked to market if gasoline futures close the next day at $2.97?

• A) A loss of $1,260 is posted to the account.
• B) A gain of $1,260 is posted to the account.
• C) A loss of $12,600 is posted to the account.
• D)A gain of $12,600 is posted to the account.

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Definitions:

Information Overload

Occurs when an individual is exposed to more information than they can process or handle, leading to overwhelm or decision-making difficulties.

Functional Organization

An organizational structure where the company is divided into departments based on their functions, such as marketing or finance.

Product Design

The process of ideating, creating, and iterating products that solve users’ problems or address specific needs in the market.

Multidivisional Design

An organizational structure where operations are grouped into semi-autonomous divisions based on product, service, or market, allowing for focused management and resource allocation.