Asked by Dasia Monique' on Apr 25, 2024
Verified
With regard to a futures contract, the long position is held by
A) the trader who bought the contract at the largest discount.
B) the trader who has to travel the farthest distance to deliver the commodity.
C) the trader who plans to hold the contract open for the lengthiest time period.
D) the trader who commits to purchasing the commodity on the delivery date.
E) the trader who commits to delivering the commodity on the delivery date.
Futures Contract
A Futures Contract is a legal agreement to buy or sell a particular commodity or financial asset at a predetermined price at a specified time in the future.
Delivery Date
In finance, specifically with futures contracts, it is the date on which the underlying asset must be delivered or received under the terms of the contract.
- Understand futures contracts and the roles of the long and short positions.
Verified Answer
TS
Tushar Setia6 days ago
Final Answer :
D
Explanation :
The long position in a futures contract refers to the party who agrees to buy the underlying asset at a future date. This position is taken with the expectation that the price of the asset will rise in the future.
Learning Objectives
- Understand futures contracts and the roles of the long and short positions.
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