On June 30, 2011, the price of 5,000 ounces of silver for December 1, 2013, was about $36 an ounce (or $180,000 for all 5,000 ounces) . Suppose Chloe believes that the price of an ounce of silver in December 2013 will be $20. Should Chloe agree to buy or sell silver in a futures contract?
A) She should buy, because $20 is cheaper than $36.
B) She should buy, because it will enable her to make $179,980.
C) She should sell, because $20 is cheaper than $36.
D) She should sell, because it will enable her to make $179,980.
Correct Answer:
Verified
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