A chocolate company which uses the futures market to lock in the price of cocoa to protect a profit is an example of:
A) a long hedge.
B) a short hedge.
C) purchasing futures to guard against a potential loss.
D) Both a long hedge; and purchasing futures to guard against a potential loss.
E) Both a short hedge; and purchasing futures to guard against a potential loss.
Correct Answer:
Verified
Q1: Futures contracts contrast with forward contracts by:
A)
Q3: A derivative is a financial instrument whose
Q4: LIBOR stands for:
A) Lausanne Interest Basis Offered
Q5: Two key features of futures contracts that
Q6: A potential disadvantage of forward contracts versus
Q7: The main difference between a forward contract
Q8: You hold a forward contract to take
Q9: Which of the following is true about
Q10: A farmer with wheat in the fields
Q11: Which of the following terms is not
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