An individual who neither uses nor produces a commodity but sells a futures contract for the asset is:
A)Speculating that the price of the commodity is going to fall.
B)Speculating that the price of the commodity is going to increase.
C)Hedging trying to transfer risk.
D)Using arbitrage to earn profits without taking a risk.

Question

Quizplus · Accepted Answer

An individual who sells a futures contract without using or producing the commodity is speculating that the price will fall, as they aim to profit by buying back the contract at a lower price.

An Individual Who Neither Uses nor Produces a Commodity but Sells