Suppose You Buy an Asset at $70 and Sell a Futures

question 56

Multiple Choice

Suppose you buy an asset at $70 and sell a futures contract at $72.What is your profit if,prior to expiration,you sell the asset at $75 and the futures price is $78?

• A)-$1
• B)$2
• C)$1
• D)-$6
• E)none of the above

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Definitions:

Influenza

A highly contagious viral infection of the respiratory passages causing fever, severe aching, and catarrh, and often occurring in epidemics.

Fever

An elevated body temperature, often a sign of infection or illness.

Peau D'orange

A term describing skin that looks dimpled or puckered, resembling the surface of an orange, commonly associated with inflammatory breast cancer.

Thickened

The condition or process of becoming denser or more compact in structure.