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Palma Reale Is an Italian Manufacturer of Pasta

Question 5

Multiple Choice

Palma Reale is an Italian manufacturer of pasta. Due to worsening droughts, Palma Reale has decided to hedge its risks associated with purchasing durum wheat by purchasing wheat futures. What risk is Palma Reale hedging against?


A) Credit risk
B) Currency risk
C) Price risk
D) Other price risk

Correct Answer:

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