Which of the Following Players Would Require a Put Option

question 3

Multiple Choice

Which of the following players would require a put option in order to hedge their natural position in the market?

• A)A farmer who buys corn to feed his livestock
• B)A farmer who sells peanuts to a chocolatier
• C)A farmer who has financed his land with a floating rate mortgage
• D)A miller who buys wheat from a farmer

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Definitions:

Superior Performance

Outstanding levels of achievement or productivity in work or a specific task, often exceeding the standard expectations.

Contingency Planning

The process of preparing for unexpected events by developing strategies and actions to mitigate risks and ensure organizational continuity.

Identical

Exactly the same, or very similar in every detail.

Participatory Planning

Planning that includes the persons who will be affected by plans and/or those who will implement them.