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A Hedger Who Buys a Futures Contract Is Betting That

question 61

Multiple Choice

A hedger who buys a futures contract is betting that prices will _____ at the expiration of the contract.


Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.

Marginal Social Benefit

The additional benefit to society from consuming one more unit of a good or service, considering both private and external benefits.

Marginal Social Cost

The additional cost to society as a whole for producing one more unit of a good or service.

Public Good

A product or service that is available for all people to consume, regardless of whether any individual pays for it or not, typically provided by the government.

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