Futures Contracts Can Be Used For

question 39

Multiple Choice

Futures contracts can be used for:

• A)hedging exposures to volatile financial variables
• B)speculating on the increase in the value of the contract item
• C)speculating on the decrease in the value of the contract item
• D)hedging the risk of an adverse movement in the future spot price.
• E)All of these.

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Definitions:

External Stakeholders

Individuals or groups outside of an organization who are affected by its activities and decisions, such as customers, suppliers, and the community.

Internal Differentiation

The division of labor and specialization within an organization that creates distinct roles and responsibilities.

Network-Designed Organization

An organizational structure that focuses on decentralization, where operations are connected by informal networks and the flow of information.

Virtual Organization

A company that operates online, often relying on a network of remote workers or partners, without a physical presence or traditional office space.