A 3-month futures contract on gold is priced at $1,200 per troy ounce when the contract is initiated.If the price of gold rises every day over the 3-month period,then when the contract is settled,the buyer will ________ and the seller will ________.

Question

Quizplus · Accepted Answer

Since the price of gold rises every day over the 3-month period, the buyer will gain as they are buying gold at a lower price than the market price at settlement. Conversely, the seller will lose as they will be selling gold at a lower price than the market price at settlement. Therefore, the correct choice is B.

A 3-Month Futures Contract on Gold Is Priced at $1,200