Which of the Following Is(are)correct Statements About the Buyer of a Futures

question 32

Multiple Choice

Which of the following is(are) correct statements about the buyer of a futures contract?
I.The contract buyer is short on the position.
II.The contract buyer wants the price of the item to increase.
III.The buyer can liquidate the position with an offsetting transaction.
IV.The majority of the buyers actually take delivery of the item.

• A)II only
• B)I and II only
• C)I and IV only
• D)II and III only

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Definitions:

Immaterial Breach

A minor violation of a contract that does not significantly harm the interests of the other party or affect the overall performance of the contract.

Mitigate

Mitigate means to make less severe, serious, or painful; in legal and business contexts, it often refers to actions taken to reduce risks or minimize the impact of damages.

Damage

A monetary compensation that a party is legally obligated to pay to another as a result of loss or injury.

Bankruptcy

A legal process through which individuals or businesses unable to meet their financial obligations can seek relief from some or all of their debts.