1. John owns a large grocery store chain in Central Illinois, and he likes to sell pumpkins during October, so he contracts with farmer Jill to buy pumpkins from her. She will provide a total of 1000 pumpkins, for which John will pay $1000, with delivery and payment on October 1. What kind of contract is this?
A. a futures contract
B. an options contract
C. a forward contract
D. a swap contract
2. Wildcat oil drillers in Texas face the decision of whether to sell their oil at spot or agree to sell to a company like Kokolene at a set price. Suppose the partners in Dark Sun Energy, which has wells in the oil patch, believe that a regional war between Iran and other countries will happen in the next six months, but not many others think this is at all likely. In such a situation, Dark Sun Energy would be better off entering into a one-year forward contract with Kokolene.
A. True
B. False