Luke Owns a Large Farming Operation That Encompasses Over 5,000

question 55

Multiple Choice

Luke owns a large farming operation that encompasses over 5,000 acres of corn. The crop this year is abundant and will be ready for harvesting next month. Luke likes the market prices today but expects the prices to decline over the next month as the supply of corn increases. Which one of the following positions should Luke take to hedge his corn crop?

• A)sell in the spot market today
• B)buy in the spot market today
• C)take a long futures position
• D)take a short futures position
• E)sell in the spot market today and take a long position in the futures market

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Definitions:

Perception of Fairness

The way individuals interpret and judge the fairness of procedures and outcomes in a social context.

Leaderless Group Discussion

A group interaction technique without a designated leader, used to observe participants' natural leadership abilities and collaborative skills.

Oral Communication Skills

The ability to express ideas and information verbally in a clear, effective, and appropriate manner.

Selling Abilities

The skills and talents possessed by an individual that enable them to effectively sell products or services.