When purchasing a futures contract, the buyer:
A) agrees to pay the seller at a later date, based on the asset's future price.
B) assumes very little risk that the asset's future price will fluctuate.
C) must pay the seller a set amount, regardless of what the future price turns out to be.
D) None of these are true.

Question

Quizplus · Accepted Answer

The buyer of a futures contract agrees to purchase the underlying asset at a predetermined price at a specified future date, which means they must pay the seller the agreed-upon amount, regardless of the asset's market price at the time of contract fulfillment.

When Purchasing a Futures Contract, the Buyer