Category: Business and Money > Finance
Asked by: fatima1102-ga
List Price: $2.00
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.
Answered By: omnivorous-ga on 11 Sep 2005 06:41 PDT
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 -- Answers.com "Futures contract" http://www.answers.com/topic/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: Answers.com "Forward contract" http://www.answers.com/topic/forward-contract Google search strategy: "futures contract" definition Best regards, Omnivorous-GA
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From: politicalguru-ga on 11 Sep 2005 01:18 PDT
Google Answers discourages and may remove questions that are homework or exam assignments.
From: potollomuck-ga on 11 Sep 2005 11:37 PDT
The correct answer is "long hedge." http://www.investinginoptions.com/glossary_L.html
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