If an Individual Who Has Entered a Futures Contract to Buy

question 26

Multiple Choice

If an individual who has entered a futures contract to buy one ounce of gold for $553 decides to reverse their position when the futures price is $555,they will:

• A)effectively now have two positions with the exchange.
• B)will still have one contract with the exchange.
• C)make a profit of $2.
• D)make a loss of $2.

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Definitions:

Standard Deviation

A measure of the dispersion or spread of a set of numbers, indicating how much the values in the set deviate from the mean.

Test Statistic

A calculated value from sample data used to test a hypothesis within the framework of a statistical test.

Average Delivery Time

The mean time taken for goods to be delivered from the point of dispatch to the recipient.

Test Statistic

A quantity determined from the data of a sample within a hypothesis testing framework, utilized to assess the rejection of the null hypothesis.