Chapter 02 · Section 2.1

Positions

Suppose that Lara, an investor, has a long position in 10 December 350 CMX gold futures calls.

Please select the true statements:

a) Lara has limited loss and unlimited profit potential.
b) Lara has unlimited loss and limited profit potential.
c) Lara has the right to buy at 350 but no obligations.
d) Lara has the obligation to buy at 350 if she is assigned
• e) a and c
  Yes. Lara has the right, but not the obligation, to buy 10 COMEX gold futures contracts (100 oz. per contract) at $350 per ounce. Because she has the right to choose, her loss is limited to the premium paid. Continue
  f) b and c

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