Suppose You Buy an Asset at $70 and Sell a Futures

question 56

Multiple Choice

Suppose you buy an asset at $70 and sell a futures contract at $72.What is your profit if,prior to expiration,you sell the asset at $75 and the futures price is $78?

• A)-$1
• B)$2
• C)$1
• D)-$6
• E)none of the above

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Definitions:

Narrowcast

A broadcasting strategy targeting a specific or niche audience, as opposed to broadcasting to a wider, general audience.

Micro-market

A small, specific market segment characterized by particular consumer preferences and demands.

Scarcity

A situation in which resources or goods are limited in availability, leading to increased value and demand.

Psychological Principle

Fundamental concepts or assumptions in psychology that explain behaviors, thoughts, and emotions.