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:

Natural Science Inquiry

A methodological approach to investigating phenomena in the natural world through observation, experimentation, and hypothesis testing.

Empirical Reasoning

The process of reasoning based on observed and measured phenomena, used to form conclusions that are based on empirical evidence.

Heuristic

A practical approach or method used to solve problems quickly or to make judgments, based on experience and less-than-complete data.

Cosmos TV Series

A popular science documentary series exploring the universe, its origins, and the laws of nature, initially hosted by Carl Sagan and later by Neil deGrasse Tyson in its latest versions.