Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. your company buys wheat to make bread. how can you

Your company buys wheat to make bread. How can you hedge your exposure to the price...

70.2K

Verified Solution

Question

Finance

Your company buys wheat to make bread. How can you hedge yourexposure to the price of wheat? Check all that apply: Buy calloptions on wheat

1.Buy wheat futures

2.Buy put options on wheat

3.Sell call options on wheat

4.Sell wheat futures

Answer & Explanation Solved by verified expert
4.4 Ratings (775 Votes)
Only one of the 5 options given in question can be used for hedging your exposure to the price of the raw material of bread ie is wheat You can Buy wheat futures As your company makes bread so the requirement of wheat will always will be there so    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Your company buys wheat to make bread. How can you hedge yourexposure to the price of wheat? Check all that apply: Buy calloptions on wheat1.Buy wheat futures2.Buy put options on wheat3.Sell call options on wheat4.Sell wheat futures

Other questions asked by students

Q

linked genes due to physical linkage are: a) found in the same species b) genes on different...

Biology
Q

Discribe in 300. words systems like RSA; authentication in public-key systems uses digital signature it...

Advance Math
Q

Howarth Manufacturing Company purchased a lathe on June 30, 2014, at a cost of $115,000. The...

Accounting
Q

Suppose that you decide to buy a car for 29 635 including taxes and license...

Statistics
Q

Outside a home there is an 8 key keypad with letters A B C D...

Statistics
Q

Which one of the following is a source of cash? Group of answer...

Accounting
Q

The following data pertain to an investment proposal: \table[[Investment in the Project (equipment),$14,000

Accounting
Q

Organa Corp's T-account for cash, along with its beginning balance is presented below. The tran...

Accounting
Q

Question Question # 1 ( Please Help Me With The Ones That...

Accounting
Q

Describe the accounting valuation for bonds at date of issuance.

Accounting
Q

Rodriguez Company pays $395,380 for real estate with land, land improvements, and a building. Land...

Accounting
Q

Can you help me on how to calculate the direct labor mix variance? thank...

Accounting