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

Question

Quizplus · Accepted Answer

A producer can hedge against a potential decline in the price of their product by selling a futures contract, locking in a price for future delivery.

A Producer That Is Worried About the Future Price That