When You Sell a Futures Contract, Your Futures Position Is

question 55

Multiple Choice

When you sell a futures contract, your futures position is:

• A) flat.
• B) long.
• C) short.
• D) the same as the cash position.
• E) b. and d.

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Definitions:

Perpetuity

A type of financial annuity that generates an infinite series of equal payments over an indefinable period of time.

Dividends

Cash payouts made by a corporation to its equity holders, usually stemming from the corporate profits.

Discount Rate

The interest rate used to discount future cash flows to their present value, essentially reflecting the opportunity cost of capital.

Present Value

The up-to-date valuation of a future financial sum or cash flow sequence, considering a determined rate of return.