____ buy and sell futures contracts to offset an otherwise risky position in the spot market.
A) Speculators
B) Floor brokers
C) Market makers
D) Hedgers

Question

____ buy and sell futures contracts to offset an otherwise risky position in the spot market.
A) Speculators 
B) Floor brokers
C) Market makers
D) Hedgers

Quizplus · Accepted Answer

Hedgers buy and sell futures contracts as a risk management strategy to offset their exposure in the spot market. They are typically producers or consumers of the underlying asset seeking to lock in a price for their goods or services. Speculators trade futures contracts with the goal of profiting from price fluctuations, while floor brokers facilitate trades on exchanges and market makers help maintain liquidity by continuously buying and selling futures contracts.

____ Buy and Sell Futures Contracts to Offset an Otherwise