Which of the Following Is True

question 20

Multiple Choice

Which of the following is true?

• A) Gold producers should always hedge the price they will receive for their production of gold over the next three years
• B) Gold producers should always hedge the price they will receive for their production of gold over the next one year
• C) The hedging strategies of a gold producer should depend on whether it shareholders want exposure to the price of gold
• D) Gold producers can hedge by buying gold in the forward market

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Definitions:

Feasible Levels

Feasible levels indicate the range within which objectives or operations can be realistically achieved or maintained.

Opportunity Cost

The price paid by not choosing the second-best option available during a decision-making process.

Economy

The mechanism through which a society manufactures, allocates, and utilizes goods and services.

Opportunity Cost

The foregone benefit that could have been enjoyed if an alternative choice had been made.