A Farmer Has a Long Position in Barley and Hedges

question 41

Multiple Choice

A farmer has a long position in barley and hedges it with a short position in wheat. Which one of the following terms applies to this situation?

• A)cross-arbitrage
• B)parity play
• C)market arbitrage
• D)cross-hedge
• E)program trade

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Definitions:

Technique Of Production

The specific methods, tools, and processes used in the production of goods and services.

Production Technology

Production technology encompasses the methods, equipment, and processes used to produce goods and services, focusing on increasing efficiency and reducing production costs.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to supply at that price.

Price Of Corn

The cost at which corn is bought and sold in the market, influenced by factors like demand, supply, and agricultural conditions.