Suppose the Standard Size of a Copper Futures Contract Is

question 14

Multiple Choice

Suppose the standard size of a copper futures contract is 25,000 pounds each.At initiation of a futures contract,the futures price is $22.50 per pound.At expiration of the futures contract,the copper price is $19.50 per pound.Which of the following is true?

• A)The short profits by $3 per pound.
• B)The long profits by $3 per pound.
• C)Demand for copper has risen relative to its supply.
• D)The two parties split the profit.

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