By selling short a futures contract of $100,000 at a price of 115,you are agreeing to deliver ________ face value securities for ________.
A) $100,000; $115,000
B) $115,000; $110,000
C) $100,000; $100,000
D) $115,000; $115,000

Question

Quizplus · Accepted Answer

By selling short a futures contract, you are agreeing to deliver the underlying asset at a future date at a predetermined price. In this case, the futures contract has a face value of $100,000 and is being sold at a price of 115. Therefore, the contract value is $115,000 ($100,000 * 115%). When the contract expires, the seller is obligated to deliver $100,000 worth of the underlying asset (securities) to the buyer at the agreed-upon price of $115,000.

By Selling Short a Futures Contract of $100,000 at a Price