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Suppose You Agree to Purchase One Ounce of Gold for $382

question 55

Multiple Choice

Suppose you agree to purchase one ounce of gold for $382 any time over the next month. The current price of gold is $380. The spot price of gold then falls to $377 the next day. If the agreement is represented by a futures contract marking to market on a daily basis as the price changes,what is your cash flow at the end of the next business day?


Definitions:

Individual Sales

Transactions that target single customers rather than large orders or sales to businesses, focusing on personalized experiences or customization.

Financial Reporting

Financial reporting involves the disclosure of financial results and related information to management and external stakeholders, such as investors or regulators.

Future Cash Flows

The projected cash receipts and payments a business expects over a period in the future, important for investment and valuation purposes.

Net Income

Profit of a company after all expenses and taxes have been subtracted from total revenue.

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