The Buyer of a Futures Contract

question 14

Multiple Choice

The buyer of a futures contract

• A)assumes the short position.
• B)has the obligation to deliver the underlying financial instrument at the specified date.
• C)has the obligation to receive the underlying financial instrument at the specified future date.
• D)may, at his or her option, deliver or receive the underlying financial instrument at the specified date.

---

Definitions:

Expenses

Costs incurred by a business in the process of earning revenue.

Accounts Payable

Amounts owed by a company to suppliers or vendors for goods or services received that have not yet been paid for.

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services that have been delivered or used, but not yet paid for.

Cost of Goods Sold

The direct expenses related to the production of goods sold by a company, including the cost of the materials and labor directly used to create the good.