The Long Position in a Futures Contract Is the Party

question 118

Multiple Choice

The long position in a futures contract is the party that will:

• A)Benefit from decreases in the price of the underlying asset.
• B)Agree to make delivery of a commodity or financial instrument at a future date.
• C)Benefit from increases in the price of the underlying asset.
• D)Accept the greater share of the risk.

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Definitions:

Deferred Tax Liability

A tax obligation that a company owes but is not yet required to pay, resulting from temporary differences between the company's accounting and tax treatment of assets and liabilities.

Revenue

The total income generated by a company from its normal business operations.

Taxable

Pertaining to income or transactions subject to tax by governmental authorities.

Income Tax Rate

The percentage of an individual's or corporation's income that is paid to the government as tax.