An Individual Who Neither Uses nor Produces a Commodity but Buys

question 22

Multiple Choice

An individual who neither uses nor produces a commodity but buys a futures contract for the asset is:

• A) speculating that the price of the commodity is going to fall.
• B) speculating that the price of the commodity is going to increase.
• C) is using arbitrage to earn profits without taking a risk.
• D) is hedging and transferring risk.

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Definitions:

Method of Play

A specific strategy or manner in which a game or sport is executed, often defining gameplay style or team strategy.

Platform

A digital service or infrastructure that enables users or businesses to create, share, and interact with digital content or to engage in social and commercial transactions.

Role-Playing Games

Games where players assume the roles of characters in a fictional setting, making decisions that affect the outcome of the game and story.

Milieu

The environment or surroundings where something happens or evolves, whether it be physical or social.