A firm sells a currency futures contract, and then decides before the settlement date that it no longer wants to maintain such a position. It can close out its position by:
A) buying an identical futures contract.
B) selling an identical futures contract.
C) buying a futures contract with a different settlement date.
D) selling a futures contract for a different amount of currency.
E) purchasing a put option contract in the same currency.

Question

Quizplus · Accepted Answer

The firm can close out its position by buying an identical futures contract, which offsets the original position.

A Firm Sells a Currency Futures Contract, and Then Decides