A farmer is worried about wheat prices falling at harvest time and not covering his costs. On the other hand, a baker is worried about prices rising at harvest time and leading to higher costs for him. Therefore they set a price beforehand to reduce their risks. This is an example of _____. diversification hedging the risk-reward trade-off risk spreadingWhen selling your two-year-old car, you should _____ the price you paid for it, because this sunk cost is _____ to your current decision. ignore; relevant think about; relevant think about; irrelevant ignore; irrelevant