A Purchaser of a Futures Contract Holds a _________ Position

question 68

Multiple Choice

A purchaser of a futures contract holds a _________ position.

• A) long
• B) hedged
• C) short
• D) speculative
• E) market

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Definitions:

Exercise Price

The cost at which the possessor of an option is able to purchase (in the case of a call option) or dispose of (in the case of a put option) the underlying asset.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall market capitalization remains unchanged.

Call Option

An economic agreement that grants the buyer the option to acquire an asset such as a stock, bond, commodity, or similar at an agreed-upon price before a certain deadline, without being compelled to do so.

Exercise Price

The price at which an option holder can buy or sell the underlying asset.