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:

Great Society

A set of domestic programs in the United States launched by President Lyndon B. Johnson to eliminate poverty and racial injustice.

Medicaid

A government-sponsored insurance program in the United States providing health coverage to people with low income.

War On Poverty

A set of government programs introduced in the 1960s in the United States aimed at reducing poverty rates through education, health care, and social services.

National Endowments

Financial grants provided by a government or large institution to support arts, sciences, education, and other public good initiatives.