An Individual Who Neither Uses nor Produces a Commodity but Buys

question 22

Multiple Choice

An individual who neither uses nor produces a commodity but buys a futures contract for the asset is:

• A) speculating that the price of the commodity is going to fall.
• B) speculating that the price of the commodity is going to increase.
• C) is using arbitrage to earn profits without taking a risk.
• D) is hedging and transferring risk.

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Definitions:

Schizotypal

A personality disorder characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, transient psychosis, and often unconventional beliefs.

Eccentric Behavior

Actions or mannerisms regarded as unusual or deviating from societal norms.

Irrelevant Stimuli

External or internal inputs that are unrelated to the task at hand and do not affect an individual’s current focus or actions.

Disorganized Thoughts

A symptom often associated with mental health disorders where an individual's thinking becomes chaotic and lacks clear structure.