A Chocolate Company Which Uses the Futures Market to Lock

Multiple Choice

A chocolate company which uses the futures market to lock in the price of cocoa to protect a profit is an example of:

A) a long hedge.
B) a short hedge.
C) purchasing futures to guard against a potential loss.
D) Both a long hedge; and purchasing futures to guard against a potential loss.
E) Both a short hedge; and purchasing futures to guard against a potential loss.