A Producer That Is Worried About the Future Price That

question 117

Multiple Choice

A producer that is worried about the future price that will be available when the product is to be sold can hedge this price risk by:

• A) buying a futures contract.
• B) selling a futures contract.
• C) buying a put option.
• D) selling a call option.

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Definitions:

Sedition Act

Legislation enacted by governments that makes it a crime to speak or act in a way that encourages rebellion against the authority of the state.

War Industries Board

A U.S. government agency established during World War I to coordinate the purchase of war supplies and to ensure efficient production and distribution.

Eugenics

A belief and practice aimed at improving the genetic quality of the human population, often through selective breeding and sometimes associated with morally controversial policies.

Public Policy

The set of principles and actions adopted and implemented by governmental entities to solve societal issues or achieve specific goals.