The Basic Difference Between Speculators and Hedgers in Futures Contracts

question 22

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:

Fourteen Points

President Woodrow Wilson’s 1918 plan for peace after World War I; at the Versailles peace conference, however, he failed to incorporate all of the points into the treaty.

Self-Determination

The principle that peoples have the right to freely choose their sovereignty and international political status with no interference.

League of Nations

An international organization established after World War I to promote peace and cooperation among countries, though it ultimately proved ineffective at preventing conflict.

Election of 1916

The presidential election in the United States in which Woodrow Wilson was re-elected, largely focusing on issues of American neutrality in World War I.