Using Options to Reduce Risk Is Called

question 54

Multiple Choice

Using options to reduce risk is called:

• A)speculation.
• B)a naked position.
• C)hedging.
• D)a covered position.

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Definitions:

Units Sold

The total quantity of a product that has been sold during a specific period.

Direct Costs

Expenses that can be directly tied to the production of a specific good or service, such as raw materials and labor.

Shoe Department

A specialized division within a retail store or company dedicated to the sale and promotion of footwear.

Fixed Manufacturing Cost

Costs that do not vary with the level of production output, such as rent, salaries, and insurance, which are necessary for the production process but remain constant regardless of the units produced.