A producer that is worried about the future price that will be available when its product is to be sold can best hedge this price risk by:
A) buying a futures contract.
B) selling a futures contract.
C) buying a call option.
D)selling a call option.

Question

Quizplus · Accepted Answer

Selling a futures contract allows a producer to lock in a price for their product at a future date, effectively hedging against the risk of falling prices.

A Producer That Is Worried About the Future Price That