If the Firm Must Buy Silver in the Future and Thus

question 1

Multiple Choice

If the firm must buy silver in the future and thus pay for the metal in the future, management may reduce the risk of loss from an increase in the price of silver by

• A) ​taking a long position and entering a contract to buy silver
• B) ​taking a short position and entering a contract to deliver silver
• C) ​accepting delivery early
• D) ​refusing to accept delivery if the price rises

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Definitions:

Moral Dilemmas

Situations in which a difficult choice has to be made between two or more actions, each of which has morally significant consequences.

Civilize

The process or act of bringing a society to a stage of social, cultural, and moral development considered to be more advanced, often viewed critically as implying supremacy over other cultures.

Americanized

The process through which non-American cultures, practices, or individuals become assimilated or adapted to American customs and values.

European-American

An individual residing in the United States who has European ancestry or heritage.