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A producer holding a commodity is said to be _______________ and could hedge by going __________ a futures contract a. Long long b. Long short c. Short short d. Short long

A producer holding a commodity is said to be _______________ and could hedge by going __________ a futures contract a. Long long b. Long short c. Short short d. Short long

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Costs And The Supply Of Goods
Section: Chapter Questions
Problem 1CQ
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A producer holding a commodity is said to be _______________ and could hedge by going __________ a futures contract

a. Long long

b. Long short

c. Short short

d. Short long

 

Expert Solution
Step 1

A commodity is a fundamental decent utilized in business that is compatible with different products of a similar kind. Items are frequently utilized as contributions to the creation of different labor and products. The nature of a given commodity might contrast somewhat, however it is basically uniform across makers. At the point when they are exchanged on a trade, products should likewise fulfill determined least guidelines, otherwise called a basis grade. 

 

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