Question

If a purchaser enters a futures contract with an agreement to buy a crop for $200 per ton next month, which of the following demonstrates the result of the price rising to $225 at that time?

Responses


The purchaser would still pay only the $200 for the commodity

The purchaser would have the option of cancelling the deal or paying the extra $25 per ton.

The purchaser would be let out of the deal and a new deal would be created.

The purchaser would be required to pay the extra $25 per ton.

Answer 1

A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future.

With this the answer would be the first option “The purchaser would still pay only the $200 for the commodity” sense it was a predetermined price.

Step-by-step explanation: