The User of a Commodity Who Is Trying to Insure

question 26

Multiple Choice

The user of a commodity who is trying to insure against the price of the commodity rising would:

• A) take the short position in a futures contract.
• B) take the long position in a futures contract.
• C) be better off speculating on price movements and earning higher profits.
• D) want to hedge by selling a futures contract.

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Definitions:

Self-Silencing

The process of suppressing one's own thoughts, feelings, or needs, often to avoid conflict or to maintain harmony in relationships.

Self-Debasement

The act of lowering one’s own dignity or worth through critical self-evaluation or demeaning behavior.

Self-Efficacy

An individual's belief in their own ability to succeed in specific situations or accomplish a task.

Socialize Babies

The process by which infants are taught the norms, values, and behaviors deemed appropriate in their society, beginning at a very young age.