A Long Futures Position Means That a Trader Holds More

question 47

True/False

A long futures position means that a trader holds more contracts that have a longer period to their settlement date than contracts with a shorter period to settlement.

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Definitions:

Downward-Sloping Demand Curves

A graphical representation indicating that as the price of a good or service decreases, the quantity demanded increases, and vice versa.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit from the market.

Identical Goods

Products that are indistinguishable from each other in the eyes of the consumer, often associated with perfect competition markets.

Profit-Maximizing Output

The level of production at which a company can achieve the highest profit, where marginal revenue equals marginal cost.