Fred purchased a futures contract on live hogs through Broker A. After purchasing the contract, Fred moved his investments to Broker B. During the transition, the contract on the hogs was forgotten. When the delivery date for the futures contract arrived,
A) the pigs were not delivered because Fred did not ask for them.
B) the futures contract was not exercised.
C) Fred took delivery of live hogs.
D) Broker A had to pay for the hogs so that they would not be delivered to Fred.

Question

Quizplus · Accepted Answer

Futures contracts are binding agreements, and unless Fred closed the position before the delivery date, he would be obligated to take delivery of the live hogs.

Fred Purchased a Futures Contract on Live Hogs Through Broker