Assume a futures contract on gold is based on 100 troy ounces with prices quoted in dollars per troy ounce.Assume one contract called for delivery some time during the month of April.The price of gold opened the month at $1,194.The low quote for April was $1,189,the high was $1,212,and the end of month settle quote was $1,197.By what amount did the value on one contract vary over the month of April?
A)$30
B)$23
C)$3,000
D)$2,300
E)$300

Question

Quizplus · Accepted Answer

The value of one contract varied by the difference between the high and low quotes for April. The high was $1,212 and the low was $1,189, so the difference is $23 per troy ounce. Since the contract is for 100 troy ounces, the total variation is $23 * 100 = $2,300.

Assume a Futures Contract on Gold Is Based on 100