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Q: business ( Answered 5 out of 5 stars,   2 Comments )
Subject: business
Category: Business and Money > Finance
Asked by: fatima1102-ga
List Price: $2.00
Posted: 10 Sep 2005 23:39 PDT
Expires: 10 Oct 2005 23:39 PDT
Question ID: 566675
A processor of a commodity can use a __________ to reduce the risk 
            of an increase in the price of the commodity which the processor 
            must purchase.
Subject: Re: business
Answered By: omnivorous-ga on 11 Sep 2005 06:41 PDT
Rated:5 out of 5 stars
Fatima1102 --

The answer is probably a "futures contract," as it is the financial
risk-management technique commonly used by businesses in times of
price volatility.  Airlines and even gas stations are using them today
with gas & oil prices --
"Futures contract"

However, it's more likely that a "forward contract" will be used to
delivery of a commodity at a future date.  Since it's a special
category of a "futures contract," I'd stick with the first answer:
"Forward contract"

Google search strategy:
"futures contract" definition

Best regards,

fatima1102-ga rated this answer:5 out of 5 stars

Subject: Re: business
From: politicalguru-ga on 11 Sep 2005 01:18 PDT
Google Answers discourages and may remove questions that are homework
or exam assignments.
Subject: Re: business
From: potollomuck-ga on 11 Sep 2005 11:37 PDT
The correct answer is "long hedge."

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