Which One of the Following Methods of Setting Prices Would

question 49

Multiple Choice

Which one of the following methods of setting prices would reduce the transactions exposure for both the buyer and seller of a commodity swap contract?

• A) Setting a permanent price at which a commodity will be traded
• B) Setting the price at the minimum spot price during a given period of time
• C) Setting the price equal to the spot price on the delivery date
• D) Using the average market price over a given period of time
• E) Setting the contract price equal to some percentage, less than 100 percent, of the market price on any given day

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Definitions:

Lost-Time Accidents

Workplace incidents resulting in an employee being unable to work for a period of time, causing loss of productivity and potentially incurring costs associated with workers' compensation.

Customer Satisfaction

An evaluation of the degree to which a company's products or services exceed or fulfill customer expectations.

Return On Sales

A financial ratio that measures the percentage of profit made from sales after covering operating expenses.

Expectancy Theory

A motivational theory suggesting that an individual's motivation depends on their expectation of the outcome and the value they place on that outcome.