This Financial Instrument (Sometimes Referred to as a Commodity Option)

question 17

Multiple Choice

This financial instrument (sometimes referred to as a commodity option) permits the holder to buy if a call, or to sell if a put, a specific underlying futures contract at a fixed price up to a specific expiration day

• A) forward
• B) futures option
• C) swap
• D) commodity swap
• E) futures swap

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Definitions:

Product Prices

The amount of money required to purchase a good or service, often influenced by factors such as production costs, competition, and demand.

Narrow Range

A situation where variations or differences within data points, options, or outcomes are minimal or significantly limited.

Blue Ocean Strategy

A business strategy that focuses on creating new market spaces (blue oceans) where there is no competition, as opposed to competing in existing industries (red oceans).

Competitive Advantage

A situation or factor that places a company in an advantageous or dominant position over its rivals in the business.