Mid-States Beef is a commercial feedlot business.Currently,the company has over 10,000 cattle in feedlots.Mid-States is concerned that the price of corn,the grain fed to the cattle,will increase significantly.The risk that the price of corn may increase and harm the profitability of Mid-States Beef's operations is a(n)
A)currency exchange rate risk.
B)property risk.
C)commodity price risk.
D)interest rate risk.

Question

Quizplus · Accepted Answer

Commodity price risk refers to the risk of changes in the prices of a commodity, such as corn, that a company relies on for its operations. In this scenario, Mid-States Beef is concerned about the potential increase in the price of corn, which could harm their profitability. Therefore, the risk they are facing is commodity price risk. The other options such as currency exchange rate risk, property risk, and interest rate risk do not apply in this scenario.

Mid-States Beef Is a Commercial Feedlot Business