Use This Information to Answer the Questions 3-4

question 9

Multiple Choice

Use this information to answer the questions 3-4.
You purchase a futures contract for September delivery September 15^th of 62,500 pounds on March 15^th. The pound futures exchange rate is $1.65 per pound. The bank has a margin requirement of 2 percent.
-To secure the futures contract deal with the bank,you will have to put ______ as a deposit with the bank.

• A) $1,250
• B) $2,000
• C) $2062.5
• D) $2087.5

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Definitions:

Accounting Profit

The net income for a company calculated by subtracting total expenses from total revenues according to accounting principles, not including implicit costs.

Short-run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a short period, considering some inputs remain fixed.

Industry-wide Price

The average or standard price level for goods and services across a specific industry or market.

Total Profit

The total earnings of a business after subtracting all costs, including both fixed and variable costs, from total revenue.