An Investor Establishes a Long Position in a Futures Contract

question 85

Multiple Choice

An investor establishes a long position in a futures contract now (time 0) and holds the position until maturity (time T) . The sum of all daily settlements will be ________.

• A) F₀ − F_T
• B) F₀ − S₀
• C) F_T − F₀
• D) F_T − S₀

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Definitions:

File Transfer Protocol (FTP)

A protocol used to upload and download files from one computer to another over the Internet.

E-mail Messages

Digital messages sent electronically from one user to another over a network, primarily using the Internet.

Client/server Model

An architecture dividing applications into two roles: clients request services, and servers provide services, supporting networked, application service requests.

TCP

Transmission Control Protocol, a fundamental protocol in the Internet protocol suite that enables reliable, ordered, and error-checked delivery of a stream of bytes between applications running on hosts communicating via an IP network.