What Must Happen to Prices Over the Course of a Contract

question 1

Multiple Choice

What must happen to prices over the course of a contract for the seller of a futures contract to maximize benefits of the hedge?

• A) Prices must decrease.
• B) Prices must increase.
• C) Prices must remain constant.
• D) The seller will profit on the hedge regardless of the direction of price movements.

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Definitions:

Piaget's

Refers to the developmental theory created by Jean Piaget, which outlines how children actively construct knowledge as they explore and interact with their world.

Symbolic Thinking

The ability to use symbols, words, or objects to represent something that is not physically present.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, typically developed during infancy.

Conservation

The protection and preservation of natural resources, environments, or cultural heritage.