The contract size for copper futures is 16 ounces. You contract to sell 1600 ounces of copper at $0.10/ ounce. If at expiration copper is selling for $0.08/ounce, what are your net profit /loss on this investment?
Answer:
Given
Contract for Copper A=1600 ounces at Price P=$0.10 / ounce
Expiration selling price S=$0.08
Since one has already made a contract for selling copper at $0.10 irrespective of expiration selling price.
So Net profit = (0.10-0.08)*1600=$32
The contract size for copper futures is 16 ounces. You contract to sell 1600 ounces of...