Multiple Choice
If a financial manager must sell a product in the future that is currently being manufactured, that individual may reduce the risk of loss from a price decline by
1) entering a futures contract to sell the good
2) entering a futures contract to buy the good
3) establishing a short position
4) establishing a long position
A) 1 and 3
B) 1 and 4
C) 2 and 3
D) 2 and 4
Correct Answer:

Verified
Correct Answer:
Verified
Q10: As a result of the small margin
Q11: The buyers (the longs) and not the
Q12: If an individual enters a contract to
Q13: A grower of corn enters a contract
Q14: The futures price and the spot price
Q16: Selling a commodity futures (entering a contract
Q17: A user of corn enters a contract
Q18: If the futures price of a commodity
Q19: Which of the following statements are true
Q20: The amount of margin required to buy