You Own Three January Futures Contracts on Gold

question 16

Multiple Choice

You own three January futures contracts on gold.What is the total value of your position as of the end of this day's trading?
Gold - 100 troy oz.: U.S.dollars and cents per troy oz.

• A) $66,050
• B) $66,740
• C) $66,820
• D) $198,150
• E) $200,460

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Definitions:

Option

In finance, a contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified timeframe.

Revoking

The action of withdrawing, canceling, or annulling something previously granted, such as a privilege, right, or contract.

Offer

A proposal by one party to enter into a contract upon specified terms, subject to acceptance.

Postbox Rule

A principle in contract law where an offer is considered accepted the moment the acceptance is sent, rather than when it is received by the offeror.