If You Hold the Futures Contract Until September 15^th and the Spot

question 27

Multiple Choice

If you hold the futures contract until September 15^th and the spot rate for pounds on September 15^th is $1.67 per pound,you will:

• A) not exercise the futures contract.
• B) lose on your position by $1,250.
• C) gain on your position by $1,250.
• D) break even by the amount of the margin.

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Definitions:

Value Determination

The process of calculating or assessing the worth of an asset, company, or financial product.

Secretary of State

A senior official who is responsible for the foreign affairs in the United States, or a governmental official with varied duties in other jurisdictions.

Court Intervention

The act of a court taking action or stepping into a situation to make a legal decision or enforce laws.

Consolidations

The combination of two or more entities into a single entity, often with the aim of enhancing efficiency or competitiveness.