Question
Which of the following are hedging strategies on a commodity for a company which uses the commodity as an input for their production (i.e. they
Which of the following are hedging strategies on a commodity for a company which uses the commodity as an input for their production (i.e. they are a buyer of the commodity)? For each of the strategies below, indicate with either a Yes if it is a hedging strategy for the buyer or a No if it is not a hedging strategy for the buyer. Also, provide an brief explanation for why youve selected either a Yes or a No for each strategy.
i. Selling a call on the commodity
ii. Buying a collar position on the commodity
iii. Buying a call on the commodity
iv. Selling a forward on the commodity
v. A short futures on the commodity
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