The Basic Difference Between Speculators and Hedgers in Futures Contracts

question 59

Multiple Choice

The basic difference between speculators and hedgers in futures contracts is that speculators:

• A)will profit regardless of the direction of price change.
• B)are not protecting their commodity holdings through an offsetting transaction.
• C)are concerned only with long-term price movements.
• D)take a position in more than one commodity at a time.

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Definitions:

High-Tech Nerve Centre

A centralized location equipped with advanced technological and communication tools to monitor, control, and manage operations.

Rapid Rescheduling

The quick adjustment and rearrangement of production or work schedules in response to changes in demand or supply.

Weather Delays

Delays in activities or operations due to unfavorable or extreme weather conditions.

Constant Work-In-Process (ConWIP)

A pull system for controlling the total amount of work in process in a manufacturing system, maintaining a constant level to improve flow and reduce waste.