Question

An investor who goes short in a futures contract will _____ any increase in value of the underlying asset and will _____ any decrease in value in the underlying asset. Multiple Choice pay; pay pay; receive receive; pay receive; receive

Answer 1

An investor who goes short in a futures contract will pay any increase in value of the underlying asset and will receive any decrease in value in the underlying asset

Who is an investor?

An investor is an individual who has invested certain amount of money in a business, firm or organization.

There is an agreement on the amount invested and how profit will be shared in the business.

Therefore, an investor who goes short in a futures contract will pay any increase in value of the underlying asset and will receive any decrease in value in the underlying asset.

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