Monique Grows and Exports Cocoa

question 256

Multiple Choice

Monique grows and exports cocoa. Her crop was partially ruined in a storm, so she needs to purchase 20 tons of cocoa in three months to meet prior contractual obligations. Monique wants to
Hedge against price changes. Each futures contract is for 10 metric tons. The current quote for the
Contract is 1,447 per ton. Monique should _____ 2 futures contracts with a total contract value of:

• A) Buy; $28,940.
• B) Buy; $289,400.
• C) Buy; $14,470.
• D) Sell; $28,940.
• E) Sell; $289,400.

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Definitions:

Widely Dispersed

Refers to assets, individuals, or entities that are spread out over a large geographic area or among a wide range of categories or types.

Socially Responsible Investing

Investing strategies that consider both financial return and social/environmental good to bring about social change.

Growing Practice

An activity or profession that is experiencing an increase in size, number, or both, often used in relation to businesses or industries.

Issuing Business

A company or entity that offers securities for sale to the public or insiders, including stocks and bonds, to raise capital.