On January 3,2012 the price of gold was $1625 per ounce and futures gold contracts for July 2013 were selling for $1575 per ounce.Suppose that you purchased a 100-ounce gold futures contract in January 2012 for $157 500 ($1575 × 100).If in March 2013 the July gold futures sold for $1700,you could sell your contract for a profit of $12 500.

Question

Quizplus · Accepted Answer

To calculate the profit, we need to find the difference between the buying price and the selling price.

Buying price = $1575/ounce x 100 ounces = $157,500

Selling price = $1700/ounce x 100 ounces = $170,000

Profit = Selling price - Buying price = $170,000 - $157,500 = $12,500

Therefore, the statement is true.

On January 3,2012 the Price of Gold Was $1625 Per