A Trader Sells 2 Futures Contracts (A Total Value of $50)when

question 15

Multiple Choice

A trader sells 2 futures contracts (a total value of $50) when the price of the contracts (based on the SPI 200 share price index) is 3030.When these contracts expire,the index itself is at 3015 points and the price of the SPI 200 contract units is 2995.The trader has:

• A) made a gain of $1750
• B) made a loss of $1750
• C) made a loss of $875
• D) made a gain of $875

---

Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like rent, wages, and insurance premiums.

Operating Income

measures a company's profit after deducting operating expenses like wages and cost of goods sold, but before interest and taxes.

Unit Selling Price

The price for which a single unit of a product is sold, not including discounts or promotions.

Unit Variable Costs

Costs that vary directly with the level of production or output, unlike fixed costs, which remain constant regardless of production volume.