You agree to buy 40,000 pounds of frozen pork bellies for delivery one year from now; upon delivery you will pay $32,400. This transaction is called a:
A) prediction settlement.
B) timing indenture.
C) futures contract.
D) hog agreement.

Question

Quizplus · Accepted Answer

This is a futures contract, which is an agreement between two parties to buy or sell an asset at a specified price and date in the future. In this case, the asset is frozen pork bellies, the price is $32,400, and the delivery date is one year from now.

You Agree to Buy 40,000 Pounds of Frozen Pork Bellies