If Market Participants Believe That the Wheat Crop Is Likely

question 28

Multiple Choice

If market participants believe that the wheat crop is likely to be unusually small,

• A)the spot price of wheat is likely to be above the futures price of wheat.
• B)the spot price of wheat is likely to be below the futures price of wheat.
• C)it will not be possible to find a seller of a futures contract in wheat.
• D)it will not be possible to find a buyer of a futures contract in wheat.

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Definitions:

Insurance

Insurance is a financial product that offers protection against potential future losses or damages in exchange for premiums paid by the policyholder.

Monthly Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset over a specified period of time.

Period Cost

Expenditures recorded in the accounting period in which they are incurred, not directly tied to the production of goods, such as selling and administrative expenses.

Factory Supervisor

An individual responsible for overseeing the operations and workers in a manufacturing facility, ensuring productivity and compliance with safety standards.