The Seller of a Copper Futures Contract Noticed That His

question 19

Multiple Choice

The seller of a copper futures contract noticed that his account was marked with a $500 gain yesterday.If the standardized contract requires delivery of 25,000 pounds of copper,what happened that day to the price of copper?

• A) The price closed down $0.02 per pound.
• B) The price closed up $0.02 per pound.
• C) The price closed down $0.20 per pound.
• D) The price closed up $0.20 per pound.

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Definitions:

Idle Capacity

The portion of a company's resources or production capability that is not being used to generate revenue or output.

Transfer Price

The price at which goods and services are sold between units of the same company.

Pump Division

A sector within a company that specializes in the production, sales, or maintenance of pumps.

Transfer Price

The price at which goods or services are transferred between departments or subsidiaries of the same company.