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NEW QUESTION: 1
It is January. Which of the following is an appropriate hedging strategy for a corn farmer expecting a harvest in June?
A. Buy a call option on corn with an expiry date in or after June
B. Sell July corn futures
C. Sell a put option on corn with an expiry date in or after June
D. Buy June corn futures
Answer: B
Explanation:
Explanation
Selling July corn futures would be the cheapest and most appropriate risk management strategy for this corn farmer trying to hedge his risk against falling prices. When June comes, he can close out the futures contracts and any loss or gain on the futures contract would be approximately equal to the change in the spot price of corn from January to June.
Buying corn futures is a bad idea because that would require the farmer to buy corn, which would only add to his expected stock of corn expected from the harvest. The same applies to buying a call option on corn. In the same way, selling a put option would be inappropriate because the buyer of the this put would have the right to sell corn to the farmer at the exercise price, which is not what we want. Therefore Choice 'b' is the correct answer.
NEW QUESTION: 2
HOTSPOT
How does the page render? For each statement in the table, select Yes if the behavior is described. Select No if it is not. Make only one selection in each column.
Hot Area:
Answer:
Explanation:
NEW QUESTION: 3
A material was planned in the context of SAP ECC material requirements planning. The MRP controller subsequently processed the material by manually converting a specific planned order into a production order. The MRP controller now accesses the current stock/requirements list and the MRP list for this material and compares these two lists.
Which of the following statements are true for the two lists at this stage? (Choose two)
A. The stock/requirements list was updated at the precise time it was accessed.
B. The MRP list displays the production order.
C. The MRP list has the status "processed".
D. The stock/requirements list displays the production order.
Answer: A,D
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