Which of the Following Would Result in a Profit of a Futures

question 122

Multiple Choice

Which of the following would result in a profit of a futures contract when the underlying currency depreciates?

• A) Buy a futures contract; sell a futures contract after the currency has depreciated
• B) Sell a futures contract; buy a futures contract after the currency has depreciated
• C) Buy a futures contract; buy an additional futures contract after the currency has depreciated
• D) None of the above would result in a profit when the underlying currency of the futures contract depreciates.

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Definitions:

Inflation Rate

The growth rate in the common price range for goods and services, downgrading the practical purchasing scope.

Money Supply

The aggregate financial assets at a specific time in an economy.

Price Rise

An increase in the cost of goods or services, often reflecting factors like inflation, increased production costs, or higher demand.

Real Factors

Real factors typically refer to tangible inputs and conditions affecting economic outcomes, such as resources, technology, and workforce skills, as opposed to financial inputs.