1. ________ is a method of hedging wherein a firm and its supplier merge so that an increase in the price of a commodity raises the firm's costs and the supplier's revenues.

A. Vertical integration

B. Business rationalization

C. Internalization

D. Storage

E. Horizontal merger

2. When firms use futures contracts for hedging, cash flows are received and paid daily rather than waiting until the end of the contract through a procedure called:

A. swaps.

B. put-call parity.

C. cash flow hedging.

D. marking to market.

E. daily settlement.