Question
A silver mining company has used futures markets to hedge the price it will receive for everything it will produce over the next 5 years.
A silver mining company has used futures markets to hedge the price it will receive for everything it will produce over the next 5 years. Which of the following is true?
| A. | It is liable to experience liquidity problems if the price of silver rises dramatically | |
| B. | It is liable to experience liquidity problems if the price of silver rises dramatically or falls dramatically | |
| C. | It is liable to experience liquidity problems if the price of silver falls dramatically | |
| D. | The operation of futures markets protects it from liquidity problems |
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Entrepreneurial Finance
Authors: Gary E. Gibbons, Robert D. Hisrich, Carlos Marques DaSilva
1st Edition
1452274177, 978-1452274171
