An entity that has taken a buy position in a futures contract on a particular item will make a gain when the price of the item decreases.

Question

Quizplus · Accepted Answer

This statement is false. An entity that has taken a buy position in a futures contract on a particular item will make a gain when the price of the item increases. This is because they have agreed to purchase the item at a set price, and if the market price goes up, they can sell their contract for a profit.

An Entity That Has Taken a Buy Position in a Futures