Forward Contracts Can Be Used Either to Hedge or to Speculate.These

question 48

Multiple Choice

Forward contracts can be used either to hedge or to speculate.These actions:

• A)increase risk in both cases.
• B)decrease risk in both cases.
• C)spread or minimize risk in both cases.
• D)none of the above.

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Definitions:

Saving and Investment

Refers to the act of setting aside a portion of current income for future use and allocating funds into ventures or assets expected to yield future returns.

Total Output

The total quantity of goods and services produced within an economy at a given overall price level and within a specified period.

Equilibrium

A state in which market supply and demand balance each other, and, as a result, prices become stable.

Aggregate Demand

The aggregate need for every good and service within an economy, measured at a certain fixed price level during a specific time frame.