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?

• A) $0
• B) $3
• C) $5
• D) -$3
• E) -$5

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Definitions:

MSE Degrees of Freedom

The number of independent values or quantities that can vary in the calculation of the mean squared error (MSE).

Degrees of Freedom

The number of independent values in a statistical calculation that can vary without violating any constraints applied to them, often informing the complexity of an analysis or test.

Completely Randomized Design

An experimental design where all subjects are assigned randomly to various treatments, ensuring that the experiment does not systematically favor any outcomes.

F-distribution

A probability distribution that arises in the analysis of variances across different groups, commonly used in ANOVA testing.