Which one of the following is an example of a long hedger?
A) an oil refinery buying crude at spot oil prices
B) a farmer who grows wheat and sells futures contracts short
C) a trader who transacts in futures for the sole purpose of making profits
D) a cereal producer who purchases wheat futures contracts

Question

Quizplus · Accepted Answer

A long hedger seeks to protect against potential price increases by purchasing futures contracts. In this scenario, the cereal producer is protecting against potential increases in the price of wheat by purchasing wheat futures contracts, indicating that they are a long hedger.

Which One of the Following Is an Example of a Long