A Firm Can Hedge the Risk of Upward Movement in Raw

question 75

Multiple Choice

A firm can hedge the risk of upward movement in raw material prices by taking one of the following positions.

• A)Buying a call option.
• B)Selling a call option.
• C)Buying a put option.
• D)Selling a futures contract.

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Definitions:

Evolutionary Change

The pathway through which multiple categories of living beings are believed to have advanced and diversified from primitive forms during the chronological history of Earth.

Fully Aquatic

Pertains to organisms that spend their entire life cycle living in water.

Baleen

A filter-feeding system inside the mouths of baleen whales, it consists of keratin plates for filtering small food items from water.

Dorudon

An extinct genus of medium-sized whales that lived approximately 40 to 33 million years ago.