A Gold Mining Firm Sells Futures Contracts Worth 1000 Ounces

question 32

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 $752 per ounce,what is the cash flow to the producer?

• A)-$2000
• B)$2000
• C)$0
• D)-$52,000
• E)$52,000

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Definitions:

Intermediate Appellate Courts

Courts that review and decide on appeals from lower courts, serving as an intermediary between trial courts and the highest court in a jurisdiction.

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Written documents submitted by parties in an appellate court, outlining arguments and legal theories for overturning or upholding a lower court’s decision.

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The process in a legal proceeding where attorneys present their case verbally before a judge or panel, emphasizing key points.

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