Lucas Owns a Large Farming Operation Which Encompasses Over 5,000

question 16

Multiple Choice

Lucas owns a large farming operation which encompasses over 5,000 acres of corn.The crop this year is abundant and will be ready for harvesting next month.Lucas likes the market prices today but expects the prices to decline over the next month as the supply of corn increases.Which one of the following positions should Lucas take to hedge his corn crop?

• A)sell in the spot market today
• B)buy in the spot market today
• C)take a long futures position
• D)take a short futures position
• E)sell in the spot today and take a long position in the futures market

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Definitions:

Whole Grains

Grains that contain all essential parts and naturally-occurring nutrients of the entire grain seed, offering health benefits over refined grains.

Saturated Fat

A type of fat found in animal products and some plant oils, known for raising cholesterol levels and potentially increasing heart disease risk.

MyPlate

A visual guide created by the U.S. Department of Agriculture to help Americans understand and follow healthy eating patterns, consisting of portions from different food groups.

DASH Food Plan

Dietary Approaches to Stop Hypertension; a diet plan promoting the reduction of blood pressure through healthy eating, focusing on low-sodium, high-fiber foods, and a variety of nutrients.