Question
ABC Ltd. is an iron ore mining company that offers iron products. It has used futures to hedge the price it will receive for everything
ABC Ltd. is an iron ore mining company that offers iron products. It has used futures to hedge the price it will receive for everything it will produce over the next three years. Which of the following is true? Select the most suitable answer.
a.
ABC Ltd. may experience liquidity problems if the price of iron rises dramatically or falls dramatically.
b.
ABC Ltd. may experience liquidity problems if the price of iron rises dramatically.
c.
The operation of futures markets protects ABC Ltd. from liquidity problems.
d.
ABC Ltd. may experience liquidity problems if the price of iron falls dramatically.
e.
None of the provided answers.
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Chronic Regulatory Focus And Financial Decision Making Asset And Portfolio Allocation
Authors: Navin Kumar
1st Edition
9812876936, 978-9812876935
