You Own Three November Crude Oil Futures Contracts

question 48

Multiple Choice

You own three November crude oil futures contracts.What is the settlement value of those contracts at the end day?

• A) $356,200
• B) $363,600
• C) $376,400
• D) $416,500
• E) $447,000

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Definitions:

Financial Leverage

Employing leveraged capital to enhance the expected returns on an investment.

Operating Leverage

The degree to which a company uses fixed operating costs, whereby a small change in sales significantly affects profitability.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, emphasizing the impact of fixed costs.

EBIT

Earnings Before Interest and Taxes represents a metric for gauging a firm's profit, specifically excluding expenses related to interest and taxes.