Which of the following statements is/are true about futures contracts?
I. The buyer of the contract must take delivery of the underlying commodity.
II. To reverse a position, the buyer of a contract must sell an identical contract which is recognized as offsetting the other one.
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

In futures contracts, the buyer does not necessarily have to take delivery of the underlying commodity; they can offset their position by selling an identical contract, which is recognized as reversing the position.

Which of the Following Statements Is/are True About Futures Contracts