Parties who have bought a futures contract and thereby agreed to ________ (take delivery of)the bonds are said to have taken a ________ position.
A)sell;short
B)buy;short
C)sell;long
D)buy;long

Question

Quizplus · Accepted Answer

Buying a futures contract means taking a long position because the buyer is agreeing to take delivery of the underlying asset (in this case, bonds) at a future date. Selling a futures contract involves taking a short position because the seller is agreeing to deliver the underlying asset at a future date.

Parties Who Have Bought a Futures Contract and Thereby Agreed