On March 1, you contract to take delivery of 1 ounce of gold for $415. The agreement is good for any day up to April 1. Throughout March, the price of gold hit a low of $385 and hit a high of $435. The price settled on March 31 at $420, and on April 1st you settle your futures agreement at that price. Your net cash flow is: A. -$30. B. -$20. C. -$15. D. $5. E. $20
On March 1, you contract to take delivery of 1 ounce of gold for $415. The agreement is good for any day up to April 1. Throughout March, the price of gold hit a low of $385 and hit a high of $435. The price settled on March 31 at $420, and on April 1st you settle your futures agreement at that price. Your net cash flow is:
|
A. |
-$30. |
|
B. |
-$20. |
|
C. |
-$15. |
|
D. |
$5. |
|
E. |
$20. |
The net cash flow of an association addresses the whole throughout some undefined time frame of the all-out money got (inflow) from deals and credits less the aggregate sum of cash spent (outflow) by the organization over a similar period. It is a significant proportion of an organization's capacity to endure and grow. Cash surge addresses the cash paid out over a similar period, and in like manner, does exclude liabilities that have not been met. Based on the given information in the question the net cash flows can be calculated as
Newt casflow = 420 – 415
= $5
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