Suppose You Buy an Asset at $50 and Sell a Futures

question 6

Multiple Choice

Suppose you buy an asset at $50 and sell a futures contract at $53.What is your profit at expiration if the asset price goes to $49? (Ignore carrying costs)

• A)-$1
• B)-$4
• C)$3
• D)$4
• E)none of the above

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Definitions:

Cultural Relativism

The principle of understanding and evaluating cultural practices and beliefs within their own social contexts rather than from an external standpoint.

Social Dominance Orientation

A scale that measures an individual’s preference for hierarchical relationships between social groups and the extent to which they support dominance and inequality among these groups.

Authoritarian Submission

A psychological behavior characterized by uncritical acceptance of authority, where individuals submit excessively to figures they perceive as authoritative.

Tolerance For Ambiguity

The ability or willingness of a person to accept and deal with uncertainty or unclear situations without becoming anxious or stressed.