Question
Supway is a sandwich shop, one of its main production inputs being wheat. Determine whether each of the following risk management techniques can hedge the
Supway is a sandwich shop, one of its main production inputs being wheat.
Determine whether each of the following risk management techniques can hedge the financial risk faced by Supway arising from the price of wheat that it buys.
(A) Long forward on wheat
(B) Long call option on wheat
(C) Short put option on wheat
(D) Long bear spread on wheat
(E) Short collar on wheat
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Understanding Financial Risk Management
Authors: Angelo Corelli
1st Edition
0415746183, 978-0415746182
