Question 24 is based on the following reading. (4pts each)
Commodities are often substances that come out of the earth such as crude oil, coal, aluminum, copper, gold, silver, salt, sugar, rice, wheat, and maintain roughly a universal price, fluctuated daily and based on global supply and demand. On a commodity exchange, it is the underlying standard stated in the contract that defines the commodity, not any quality inherent in a specific producer's product.
Commodities are traded in two types of markets: the spot (or cash) market where goods are bought and sold for immediate delivery, and the futures market where contracts are for future delivery. In the futures market, both businesses and producers can use futures contracts to lock in their prices and profits. In addition, investors also may buy and sell futures contracts to try to make money on price changes.
24. Which of the following statements is true? (A) The spot market is where goods are bought and sold for future delivery. (B) The futures market is where goods are bought and sold for immediate delivery. (C) Only producers can use futures contracts to lock in profits. (D) Investors may make money by buying and selling futures contracts.