Which of the Following Is NOT a Way That Hedgers

question 41

Multiple Choice

Which of the following is NOT a way that hedgers can benefit by participating in financial futures markets?

• A)They can reduce their tax liabilities.
• B)They can reduce their exposure to price fluctuations.
• C)They can access liquid markets.
• D)They can reduce their information costs by using organized exchanges.

---

Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive.

Producer Surplus

The difference between what producers are willing and able to supply a good for and the price they actually receive, measuring the benefit to producers.

Total Surplus

The total net gain to society from creating and consuming a product or service, encompassed by the combination of consumer and producer surplus.

Deadweight Loss

An inefficiency in the economy that results when the market equilibrium for a good or service isn't attained or is unattainable.