Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An organization buys crude oil on the open market and refines it into a high-quality gasoline. The price of crude oil is extremely volatile. Which

An organization buys crude oil on the open market and refines it into a high-quality gasoline. The price of crude oil is extremely volatile. Which of the following is the most appropriate risk management technique to protect the organization against these price fluctuations?

(A). Enter into long-term gasoline purchase agreements with end customers.

(B). Trade crude oil derivatives at financial markets in order to benefit from price fluctuations

(C). Purchase crude oil-related derivatives such as futures or options

(D). Stock as much raw materials as possible and consider Investing into additional facilities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

American Public School Finance

Authors: William A. Owings, Leslie S. Kaplan

1st Edition

0495807834, 9780495807834

More Books

Students also viewed these Finance questions