A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following statement is NOT true about hedging?

Group of answer choices

The company should enter into a long position in the futures contract

The company uses futures markets to reduce a particular risk they face

Hedging leads to a more predictable exchange rate being paid

The company should enter into a short position in the futures contract

Who initiates delivery in a copper futures contract

Group of answer choices

The party with the long position

The clearing house

The exchange

The party with the short position

An investor sells a futures contract on an asset when the futures price is $1,500. Each contract is on 100 units of the asset. The contract is closed out when the futures price is $1,480. Which of the following is true?

Group of answer choices

The investor has made a gain of $4,000

The investor has made a loss of $2,000

The investor has made a loss of $4,000

The investor has made a gain of $2,000