Which of the Following Statements Regarding Commodities Contracts Is FALSE

question 6

Multiple Choice

Which of the following statements regarding commodities contracts is FALSE?

• A)Firms generally do not possess better information than outside investors regarding the risk of future commodity price changes,nor can they influence that risk through their actions.
• B)Cash flows are exchanged on a monthly basis,rather than waiting until the end of the contract,through a procedure called marking to market.
• C)The firm may speculate by entering into contracts that do not offset its actual risks.
• D)When a firm authorizes managers to trade contracts to hedge,it opens the door to the possibility of speculation.

---

Definitions:

Katz

Refers to Robert L. Katz's three-skill approach to leadership, emphasizing the importance of technical, human, and conceptual skills.

Research Focus

The central theme or primary subject area that a study or investigation is concentrated on.

Leadership Levels

The different stages or hierarchies of leadership within an organization, from frontline or team leadership to top executive leadership, each with distinct roles and responsibilities.

Formal Training Programs

Structured educational or training courses designed to enhance specific skills or knowledge.