Firms Regularly Use the Following to Reduce Risk

question 75

Multiple Choice

Firms regularly use the following to reduce risk:
I. Currency options
II. Interest-rate options
III. Commodity options

• A) I only
• B) II only
• C) III only
• D) I, II, and III

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or output, including costs such as raw materials and labor directly involved in manufacturing.

Price Changes

Alterations in the cost of goods or services over time, which can be influenced by factors such as supply and demand.

Agricultural Act

Legislation that regulates agricultural production, marketing, and subsidies.

Crop Insurance Programs

Government or private insurance schemes that compensate farmers for losses to their crops due to natural disasters or adverse weather conditions.