Individuals and companies who enter into contracts in order to reduce risk are known as:
A)speculators.
B)hedgers.
C)dealers.
D)scalpers.

Question

Quizplus · Accepted Answer

Hedgers enter into contracts to reduce risk by locking in prices or rates for assets, liabilities or commodities that they own or plan to own in the future. Speculators, alternatively, enter into contracts to take on risk in order to profit from price or rate changes. Dealers facilitate trades in financial markets by buying and selling securities for their own accounts or on behalf of their clients. Scalpers attempt to profit from short-term price fluctuations in the market.

Individuals and Companies Who Enter into Contracts in Order to Reduce