A futures contract is:
A) selling two investments that are both expected to lose in the future
B) buying two investments that are both expected to make a profit in the future
C) taking two positions whose gains and losses will offset each other
D) an agreement to buy or sell a commodity or financial asset at a specified price on a later date

Question

Quizplus · Accepted Answer

A futures contract is an agreement between two parties to buy or sell a commodity or financial asset at a specified price on a later date. This allows investors to speculate on the future price of an asset and hedge against potential price changes. Choices A, B, and C do not accurately describe a futures contract.

A Futures Contract Is