You are the buyer of cocoa for a candy company. On average, the company uses 100 metric tons of cocoa each year. The futures contract size for cocoa…

You are the buyer of cocoa for a candy company. On average, the company uses 100 metric tons of cocoa each year. The futures contract size for cocoa is 10 metric tons. Since cocoa is a key ingredient in the firm’ product, any price increase in cocoa can be devastating to the firm’s net profit. Probably the best method of eliminating this price risk on cocoa would be to: A. buy a year’s worth of cocoa at one time B. buy 10 futures contracts with varying expiration dates throughout the year C. buy 23 futures contracts every calendar quarter D. sell 10 futures contracts with varying expiration dates through the year E. sell 25 futures contracts every calendar quarter

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You are the buyer of cocoa for a candy company. On average, the company uses 100 metric tons of cocoa each year. The futures contract size for cocoa… was first posted on October 8, 2020 at 7:31 am.
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