A Gold Mining Firm Sells Futures Contracts Worth 1000 Ounces

question 4

Multiple Choice

A gold mining firm sells futures contracts worth 1000 ounces at a price of $800 per ounce for maturity one year from today.If gold futures prices decrease to $798 per ounce,what is the cash flow to the producer?

• A)-$2000
• B)$2000
• C)$0
• D)$800,000
• E)$798,000

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