The Seller of a Pork Bellies Futures Contract at $1

question 27

Multiple Choice

The seller of a pork bellies futures contract at $1.41 per pound noted that the closing price of pork bellies was $1.44 today.What will happen to this contract,which requires delivery of 40,000 pounds of pork bellies at expiration?

• A) A loss of $400 is posted to the account.
• B) A gain of $400 is posted to the account.
• C) A loss of $1,200 is posted to the account.
• D) A gain of $1,200 is posted to the account.

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Definitions:

Benchmarking

The practice of comparing business processes and performance metrics to industry bests or best practices from other companies to improve performance.

Incorporate

The process of legally declaring a business as a separate entity from its owners, providing legal protections and benefits.

Management By Objectives (MBO)

Is a process of joint objective‐setting between a manager and a staff member.

External Supervisory Control

Oversight conducted by external bodies or regulators to ensure an organization meets standards or regulations.