Silver futures contracts are based on 5,000 troy ounces and are priced in dollars per troy ounce. Suppose a closing report displays these prices for a December contract: Open 17.435, High 17.450, Low 17.025, and Settle 17.119. What is the closing value for two December futures contracts on silver?
A) $174,350
B) $174,500
C) $170,250
D) $171,190
E) $172,770

Question

Quizplus · Accepted Answer

To calculate the closing value for two December futures contracts on silver, we need to first calculate the total troy ounces represented by the two contracts:

2 contracts * 5,000 troy ounces/contract = 10,000 troy ounces

Next, we need to find the average settlement price for the contracts:

(17.119 + 17.119) / 2 = 17.119

Finally, we can calculate the closing value:

10,000 troy ounces * $17.119/troy ounce = $171,190

Therefore, the correct answer is D) $171,190.

Silver Futures Contracts Are Based on 5,000 Troy Ounces and Are