A trader who wants to transfer price risk by taking a futures position to the existing position in a commodity is a _________.
A) Dealer
B) Speculator
C) market maker
D) Hedger
E) Specialist

Question

Quizplus · Accepted Answer

A hedger takes a futures position to transfer price risk from an existing position in a commodity. A dealer is a person or firm that buys and sells securities for their own account, while a speculator takes futures positions to gain profit from price movements. A market maker is a person or firm that provides liquidity in a financial market, and a specialist is a person or firm that trades in a particular security on the exchange.

A Trader Who Wants to Transfer Price Risk by Taking