Uptown Jewelers Purchased a Futures Contract on 200 Ounces of Gold

question 32

Multiple Choice

Uptown Jewelers purchased a futures contract on 200 ounces of gold to be exchanged 3-months from now.As the contract holder,Uptown Jewelers:

• A)has the right, but not the obligation, to purchase 200 ounces of gold 3 months from now.
• B)has the obligation to purchase 200 ounces of gold at the market price three months from now.
• C)has an obligation to buy 200 ounces of gold but only if the price of gold increases within the next 3 months.
• D)is expecting the price of gold to decrease and thus is locking in a selling price.
• E)will profit if the price of gold is higher three months from now.

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Definitions:

Magnesium

A lightweight, silver-white metallic element, crucial for cellular metabolism and found in chlorophyll, often used in alloys and as a dietary supplement.

Ionic Compound

A chemical compound composed of ions held together by electrostatic forces termed ionic bonding, usually formed between metal and non-metal ions.

Chlorine

A chemical element with symbol Cl and atomic number 17, known for its disinfectant properties and use in bleach.

Crystal Lattice

A highly ordered structure of atoms or molecules extending in three spatial dimensions.