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Multiply

question 200

Multiple Choice

Multiply. Multiply. A) B) C) D) E)

Definitions:

Profit

The financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Contango

A situation in futures trading where the future price of a commodity is higher than the spot price, often indicating expectations of rising prices.

Natural Hedgers

Entities or individuals who inherently have an opposite risk exposure compared to their needed market position, allowing them to hedge their risks without having to use derivative products.

Backwardation

Backwardation is a market condition in which futures prices are lower in the distant delivery months than in the near delivery months, often indicating a shortage of the commodity in the spot market.