The Trader Who Holds the Long Position in a Futures

question 60

Multiple Choice

The trader who holds the long position in a futures contract:

• A)must settle it by buying the contract item on the settlement date
• B)has sold the futures contract
• C)can closeout their position any time prior to the settlement date by taking an offsetting short position
• D)has a contractual obligation to sell the contract item on the settlement date
• E)can only closed-out the position early with the agreement of the contract's seller.

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Definitions:

Communication Model

A theoretical framework that describes the process of transmitting and receiving messages or information between two or more parties.

Encode Message

The process of transforming information into a form that can be understood by a receiver during communication.

Transmit Message

The process of conveying information or meaning from one entity or group to another through the use of mutually understood signs and semiotic rules.

Corporate Grapevine

The corporate grapevine is the informal and unofficial communication network within an organization, through which information, rumors, and gossip spread.