A Trader Who Has a __________ Position in Wheat Futures

question 90

Multiple Choice

A trader who has a __________ position in wheat futures believes the price of wheat will __________ in the future.

• A) long; increase
• B) long; decrease
• C) short; increase
• D) long; stay the same
• E) short; stay the same

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Definitions:

Unrealized Increase

The potential gain in the value of an investment that has not yet been sold and thus not yet converted into actual profit.

Donated Capital

Assets and resources given to a company without the expectation of return or compensation, often used to fund operations or expand business activities.

Contra Account

An account used in a general ledger to reduce the value of a related account when the two are netted together.

Compensatory Stock Options

Stock options given to employees as part of their compensation package, allowing them to purchase company stock at a discount in the future.