An investor enters into a long position in 10 gold futures contracts at a futures price of $1000/oz and closes out the position at a price of $1020/oz.If one gold futures contract is for 50 ounces,what are the investor's gains or losses?

Question

Quizplus · Accepted Answer

First, calculate the initial value of the position:

10 contracts x 50 oz/contract x $1000/oz = $5,000,000

Then, calculate the final value of the position:

10 contracts x 50 oz/contract x $1020/oz = $5,100,000

The investor's profit is the difference between the final value and the initial value:

$5,100,000 - $5,000,000 = $100,000

Therefore, the answer is D) $10,000.

An Investor Enters into a Long Position in 10 Gold