A Producer That Is Worried About the Future Price That

question 115

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:

Perfusion

The passage of blood or other fluids through the circulatory system to organs and tissues, providing essential nutrients and oxygen.

Alveolar Capillary Membrane

The thin layer of tissue in the lungs where gas exchange between air and blood takes place.

Gases Exchange

The biological process through which oxygen is taken into the body and carbon dioxide is expelled, primarily occurring in the lungs.

Diffusion

The passive movement of molecules or particles from an area of higher concentration to an area of lower concentration until equilibrium is reached.