A baker of bread has a long-term fixed-price contract to supply bread. Which of the following would NOT reduce her risk?
A. Hedging this risk in the wheat futures market
B. Finding a wheat farmer who will take the short position in a wheat futures contract
C. Taking the long position in wheat futures contract
D. Finding a wheat farmer who will take the long position in a wheat futures contract
Answer: D
You might also like to view...
The recency effect is:
A. a basic human tendency to overvalue recent experience when trying to predict the future. B. a hotly debated concept among psychologists and economists. C. earning a profit by betting against what everyone else is doing. D. accounting for most recent profits or losses first on financial statements.
Allocative efficiency occurs when price ______.
a. is above the ATC curve b. meets the ATC curve c. is less than marginal cost d. equals marginal cost
Under a floating exchange-rate regime with a low degree of capital mobility, an expansionary fiscal policy will most likely create pressure on
A. the central bank to expand the money supply. B. the government to impose capital controls. C. foreign central banks to expand their money supplies. D. the domestic currency to depreciate.
Refer to the figure. A weaker economy, characterized by higher unemployment rates, will:
A. reduce MB and increase MC, lowering the optimal quantity of immigrants.
B. increase MB and reduce MC, raising the optimal quantity of immigrants.
C. increase both MB and MC, and the effect on the optimal quantity is uncertain.
D. reduce both MB and MC, and the effect on the optimal quantity is uncertain.