You own 450,000 bushels of wheat. If you decide to add a short futures position in wheat you will be taking which one of the following positions?
A)short hedge
B)long hedge
C)program trade
D)short arbitrage
E)long arbitrage

Question

Quizplus · Accepted Answer

A short hedge involves selling futures contracts to protect against potential declining prices of an asset you own. By adding a short futures position in wheat, you are hedging against the risk of wheat prices falling.

You Own 450,000 Bushels of Wheat