Four Investors Enter into Long Sugar Contracts

question 39

Multiple Choice

Four investors enter into long sugar contracts. Three are speculators and one is hedging. Which of the following is hedging?

• A)Wheat farmer
• B)Cereal company
• C)Mutual fund
• D)None of these answers are correct.

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Definitions:

Reasonable Person

A legal standard used to determine how an average person would responsibly act under similar circumstances.

Society Expect

The anticipations or beliefs regarding behavior, norms, or achievements considered standard or desirable by a community or group.

Duty Of Care

Duty of care is a legal obligation to act with a certain level of attention, caution, and prudence to avoid harm to others or their properties.

Foreseeable Risks

Potential dangers or hazards that a reasonable person should be able to predict could occur under certain conditions.