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Hedging Strategies Quiz

Authored by tasha razali

Social Studies

Professional Development

Hedging Strategies Quiz
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26 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a long futures hedge used for?

To sell an asset in the future

To lock in a price for a future purchase

To minimize interest rate risks

To speculate on price increases

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is an argument against hedging?

It locks in prices for future transactions

Shareholders can make their own hedging decisions

It minimizes risks from market variables

It helps companies focus on their main business

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the spot price of crude oil on May 15 in the example?

$60 per barrel

$65 per barrel

$59 per barrel

$55 per barrel

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effective price per barrel for the oil producer if the spot price is $55?

$65

$60

$59

$55

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the gain in futures if the price of oil on August 15 is $65?

$6 million

$10 million

$0

$4 million

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a long hedge appropriate for?

Selling an asset

Purchasing an asset in the future

Speculating on price drops

Minimizing interest rate risks

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How many futures contracts does the copper fabricator take for 100,000 pounds?

5 contracts

2 contracts

3 contracts

4 contracts

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