A Futures Contract Provides the Holder with the Option to Buy

question 89

True/False

A futures contract provides the holder with the option to buy or sell a stated contract involving a commodity or financial claim at a specified price over a stated time period.

---

Definitions:

Producer Surplus

The difference between the amount producers are willing to sell a good for and the actual amount they receive due to market price.

Good X

An unspecified product or commodity in economics, used in theoretical models and discussions.

Producer Surplus

The difference between the actual price producers receive for a product and the minimum price they would accept.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied by producers.