You Have a Long Futures Position on an Asset with a Settlement

question 16

Multiple Choice

You have a long futures position on an asset with a settlement price of $30.00 and a contract expiration date of 6-months from now.If the settlement price of the contact is $30.08 tomorrow,then what cash flow will take place if you assume that the initial margin was zero?

• A) all cash settlements will take place 6-months from now
• B) you will receive $.08 per contract
• C) you will pay $.08 per contract
• D) there is not enough information to determine

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Definitions:

Functionalists

Scholars who view society as a complex system whose parts work together to promote solidarity and stability.

Society Disorganization

A state in which a society experiences a breakdown or weakening of its traditional social structures and norms, leading to social instability and problems.

Equilibrium

A state of balance or stability within a system, where opposing forces or influences are in equal proportion.

Change

The process through which something becomes different, often leading to new ways of thinking, behaving, or operating.