You Are a Baker and Need to Purchase a Substantial

question 34

Multiple Choice

You are a baker and need to purchase a substantial amount of wheat flour three months from now in preparation for your busy season. Your concern is that the price of wheat will increase substantially before you make your purchase. Which one of the following positions in wheat would be an effective hedge for you?

• A) long position in spot market
• B) short position in spot market
• C) long position in futures market
• D) short position in futures market
• E) none of the above

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Definitions:

Social Capital Models

Theoretical frameworks that emphasize the value of social networks, connections, and relationships in achieving beneficial outcomes.

Remarriage

Entering into another marriage after one has been ended by divorce or after a spouse has died.

Traditional Roles

Defined as the customary patterns of behavior and responsibilities that are considered appropriate for individuals based on their gender, age, social position, or cultural heritage.

First Marriage

Refers to an individual's initial legal or recognized marriage.