If the firm must buy silver in the future and thus pay for the metal in the future, management may reduce the risk of loss from an increase in the price of silver by
A. taking a long position and entering a contract to buy silver.
B. taking a short position and entering a contract to deliver silver.
C. accepting delivery early.
D. refusing to accept delivery if the price rises.
Answer: A
You might also like to view...
Which of the following statements is true of the Convention on Contracts for the International Sale of Goods (CISG)?
A) Parties to a contract can choose to adhere to all or part of the CISG, or they may select other laws to govern their transactions. B) Traditional contracts on sale of goods are not covered by the CISG. C) The CISG is superseded by the Uniform Commercial Code (UCC) in most states. D) The CISG requires a written contract for a sale of goods of $500 or more.
What are the main challenges in managing a supply chain?
What will be an ideal response?
Credit unions are characterized by
A) mutual ownership. B) common bond membership. C) nonprofit, tax-exempt status. D) all of the above. E) none of the above.
Which of the following can be used within a firm?
A) private IP addresses B) public IP addresses C) both A and B D) neither A nor B