Hedgers are primarily interested in
A)betting on anticipated changes in prices.
B)reducing their exposure to the risk of price fluctuations.
C)increasing market liquidity.
D)reducing the spread between bid and ask prices on bonds.

Question

Quizplus · Accepted Answer

Hedgers seek to reduce their exposure to the risk of price fluctuations by using financial instruments such as futures or options contracts to lock in prices for future transactions. They are not betting on anticipated price changes or seeking to increase market liquidity or reduce bid-ask spreads on bonds.

Hedgers Are Primarily Interested in