A financial institution that sells a particular futures contract and later purchases the same contract back is executing:

Question

Quizplus · Accepted Answer

Selling a futures contract is known as taking a short position or executing a short hedge. By later purchasing the same contract, the financial institution is closing out their short position, resulting in a profit or loss depending on the difference between the initial sale price and the purchase price.

A Financial Institution That Sells a Particular Futures Contract and Later