A long contract requires that the investor
A)sell securities in the future.
B)buy securities in the future.
C)hedge in the future.
D)close out his position in the future.

Question

Quizplus · Accepted Answer

A long contract refers to an agreement to buy securities in the future at a predetermined price. Therefore, option B - buy securities in the future - is the best choice. Option A - sell securities in the future - would be the opposite of a long contract and option C - hedge in the future - refers to risk management strategies and may or may not be necessary depending on the situation. Option D - close out his position in the future - is not a requirement of a long contract, but rather a possible action to take at some point in the future.

A Long Contract Requires That the Investor