Sugar is currently selling for $0.201 a pound while the 6-month futures price is $0.208.You take a long position in the 6-month sugar futures.Which one of the following prices would cause you the greatest loss if that price turns out to be the actual price of sugar per pound 6 months from now?
A) $0.198
B) $0.201
C) $0.205
D) $0.208
E) $0.211

Question

Quizplus · Accepted Answer

Taking a long position means you are betting that the price will go up. If the price falls to $0.198, it is the lowest among the options, causing the greatest loss compared to the futures price of $0.208.

Sugar Is Currently Selling for $0