You Have Taken a Short Position in a Futures Contract

question 28

Multiple Choice

You have taken a short position in a futures contract on corn at £2.60 per bushel.Over the next 5 days the contract settled at 2.52,2.57,2.62,2.68,2.70.Before you can reverse your position in the futures market on the fifth day you are notified to accept delivery.What will you receive on delivery and what is the net amount you receive in total?

• A)£2.60; £-0.10
• B)£2.60; £0.10
• C)£2.60; £2.70
• D)£2.70; £-0.10
• E)£2.70; £2.60

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Definitions:

Research Proposal

A detailed plan outlining the intent, methodology, expected outcomes, and significance of a proposed research project.

Internal Validity

The extent to which a study can rule out or make unlikely alternative explanations of the results.

Statistical Analysis

The process of collecting, reviewing, interpreting, and presenting data to discover underlying patterns and trends.

Literature Review

A written summary and evaluation of the existing literature on a specific topic.