Question

Which of the following is correct about futures contracts? sellers of futures contracts make a profit when prices rise sellers of futures contracts make a profit when prices fall buyers of futures contracts make profits when prices fall buyers of futures contracts make a profit when interest rates rise

Answer 1

Answer: Sellers of futures contracts make profits when prices fall

Explanation: I believe the answer would be "Sellers of futures contracts make profits when prices fall" due to most contracts being fixed price. Once the contract is signed economic prices may fall making the job cheaper for the seller.

IE: Me LLC hires you to build them a building for 1.5mil. Your cost for material would be 750k with 450k in labor producing a 300k profit. After the contract is signed, the cost for materials may go from 750k to 500k, raising your profit from 300k to 550k.

I hope this helps!

V/R

Colin