CFA Practice Question

There are 195 practice questions for this study session.

CFA Practice Question

Commodity producers are normally ______ and commodity consumers are normally ______.
A. hedgers; hedgers
B. hedgers; speculators
C. speculators; hedgers
Explanation: Commodity prices are volatile. Commodity consumers' and producers' participation in the futures market allows them to hedge or protect themselves against the risk of losses from fluctuating prices. For example, a copper smelter will hedge by selling copper futures, since it is exposed to the risk of falling copper prices.

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