Final answer:
An AMP 500,000 contract with December delivery on the Chicago Mercantile Exchange is an example of a futures contract, which is a standardized obligation to buy or sell at a specific price and date.
Step-by-step explanation:
An AMP 500,000 contract with December delivery on the Chicago Mercantile Exchange is an example of d) a futures contract. A futures contract is a standardized agreement to buy or sell the underlying commodity or financial instrument at a specific price on a specific future date. Unlike options, which give the buyer the right but not the obligation to buy or sell the asset, a futures contract represents an obligation to buy or sell the asset on the terms agreed upon.
Futures contracts are used for hedging or speculation. Hedging involves taking a position in the futures market that is opposite to a position in the physical market to reduce the risk of financial loss from price changes. Speculators attempt to predict market movements and profit from price changes without any intention of actually taking delivery of the underlying commodity or instrument.
These contracts are traded on exchanges where they are standardized in terms of quantity, delivery time, and other terms, to facilitate liquidity and market efficiency.