The Basic Difference Between Speculators and Hedgers in Futures Contracts

question 59

Multiple Choice

The basic difference between speculators and hedgers in futures contracts is that speculators:

• A)will profit regardless of the direction of price change.
• B)are not protecting their commodity holdings through an offsetting transaction.
• C)are concerned only with long-term price movements.
• D)take a position in more than one commodity at a time.

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Definitions:

Operational Plans

Define specific activities to implement strategic plans.

Strategic Plans

Define long-term needs and set action directions for the organization. Tactical plans are developed and used to implement strategic plans.

Financial Plans

Documents that outline an individual's or organization's present financial situation and long-term monetary goals, along with strategies to achieve those goals.

SMART Model

Is an approach to determining effective organisational objectives that requires that they be Specific, Measurable, Actionable, Reasonable, and Timetabled.