Which One of the Following Is an Example of a Long

question 33

Multiple Choice

Which one of the following is an example of a long hedger?

• A) an oil refinery buying crude at spot oil prices
• B) a farmer who grows wheat and sells futures contracts short
• C) a trader who transacts in futures for the sole purpose of making profits
• D) a cereal producer who purchases wheat futures contracts

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Definitions:

Utility Function

A mathematical representation that captures an individual's preference ordering for a set of goods and services.

Leather Jackets

A type of outerwear made from the hide of animals, typically cows, known for its durability, style, and warmth.

Whips

In parliamentary practice, members of a political party designated to enforce party discipline and ensure party member attendance and voting in line with party policies.

Cocoa

A powder made from roasted and ground cacao seeds, used in the production of chocolate, as well as in beverages and baking.