Which of the Following Is True About Profits from Futures

question 25

Multiple Choice

Which of the following is true about profits from futures contracts?

• A) The person with the long position gets to decide whether to exercise the futures contract and will only do so if there is a profit to be made.
• B) It is possible for both the holder of the long position and the holder of the short position to earn a profit.
• C) The clearinghouse makes most of the profit.
• D) The amount that the holder of the long position gains must equal the amount that the holder of the short position loses.
• E) Holders of short positions can recognize profits by making delivery early.

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Definitions:

Plasma Osmolality

Plasma osmolality measures the concentration of solutes in the blood plasma, indicating the body's state of hydration and influencing water balance and distribution.

Supraoptic Region

A region located above the optic chiasm in the brain, closely associated with the hypothalamus, involved in the regulation of water balance and hormone secretion.

Action Potentials

Electrical impulses that are essential for the functioning of neurons and muscle cells, facilitating communication within the body.

Ascending Limb

Part of the loop of Henle in the nephron of the kidney, involved in the reabsorption of water and solutes to concentrate urine.