Uptown Jewelers Purchased a Futures Contract on 200 Ounces of Gold

question 32

Multiple Choice

Uptown Jewelers purchased a futures contract on 200 ounces of gold to be exchanged 3-months from now.As the contract holder,Uptown Jewelers:

• A)has the right, but not the obligation, to purchase 200 ounces of gold 3 months from now.
• B)has the obligation to purchase 200 ounces of gold at the market price three months from now.
• C)has an obligation to buy 200 ounces of gold but only if the price of gold increases within the next 3 months.
• D)is expecting the price of gold to decrease and thus is locking in a selling price.
• E)will profit if the price of gold is higher three months from now.

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Definitions:

Innovation

The process of creating, developing, and implementing new ideas, products, or methods to improve or disrupt existing markets.

Market Expansion

Strategies used by businesses to sell their existing products or services to new geographical areas or markets to increase their customer base.

Perceived Value

The customer's evaluation of the benefits and costs of one product when compared with others, influencing their purchasing decisions.

Perceived Benefits

The recognized and valued positive outcomes that consumers believe they will receive from a product or service.