A food processor using commodity futures to lock in the sale price of grains is best described as what means of risk mitigation?

Name: A food processor using commodity futures to lock in the sale price of grains is best described as what means of risk mitigation?
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Question

Quizplus · Accepted Answer

Hedging is the practice of making an investment to reduce the risk of adverse price movements in an asset, such as using commodity futures to lock in prices, which is what the food processor is doing.

A Food Processor Using Commodity Futures to Lock in the Sale