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A Customer Sells a LIFFE Euro Swiss Futures Contract

question 148

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A customer sells a LIFFE Euro Swiss futures contract. Which of the following risks could he be trying to hedge?


Definitions:

Consumer Nondurable

Goods that are consumed quickly and must be purchased regularly, such as food, beverages, and toiletries.

Service

An intangible commodity that involves providing labor or expertise in exchange for payment.

Stock Market

A public market for the trading of company shares and derivatives at an agreed price; it is a key indicator of economic health.

Price Ceiling

A price ceiling is a government-imposed limit on the maximum price that can be charged for a product or service, intended to protect consumers from excessive prices.

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