You Are a Baker and Need to Purchase a Substantial

question 66

Multiple Choice

You are a baker and need to purchase a substantial amount of wheat flour three months from now in preparation for your busy season. Your concern is that the price of wheat will increase substantially before you make your purchase. Which one of the following positions in wheat would be an effective hedge for you?

• A)long position in spot market
• B)short position in spot market
• C)long position in futures market
• D)short position in futures market
• E)none of these

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Definitions:

Basic psychological needs

Fundamental requirements for mental well-being, such as the need for autonomy, competence, and relatedness.

Autonomy

The ability or right of individuals to make their own choices and control their own lives.

Integrity

The quality of being honest and having strong moral principles; moral uprightness.

Erikson's concept

Relates to Erik Erikson's theory of psychosocial development, which outlines eight stages of human development, each characterized by a specific conflict and its resolution.