A Gold Mining Firm Sells Futures Contracts Worth 1000 Ounces

question 88

Multiple Choice

A gold mining firm sells futures contracts worth 1000 ounces at a price of $700 per ounce for maturity one year from today.If gold futures prices increase to $702 per ounce,what is the cash flow to the producer?

• A)-$2000
• B)$2000
• C)$0
• D)$700,000
• E)$702,000

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