An Investor Sells a Futures Contract an Asset When the Futures

question 5

Multiple Choice

An investor sells a futures contract an asset when the futures price is $1,500.Each contract is on 100 units of the asset.The contract is closed out when the futures price is $1,540.Which of the following is true

• A) The investor has made a gain of $4,000
• B) The investor has made a loss of $4,000
• C) The investor has made a gain of $2,000
• D) The investor has made a loss of $2,000

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Definitions:

Contrast Assumption

The assumption that objects have only one label.

Novel Terms

New or recently coined words or phrases that have emerged in a language or field of study.

Appearance-Reality Distinction

The cognitive ability to distinguish between how objects appear and their true nature, which develops in early childhood.

Real Events

Occurrences or happenings that have actually taken place in the real world, as opposed to fictional or hypothetical scenarios.