Series 3: Exercise

Exercise

Match the act with its description.

A. Arbitrage

B. Long hedge

C. Scalping

D. Position trading

E. Short hedge

1. _____ A wheat farmer concerned that the price of his commodity will drop sells a wheat futures contract.

2. _____ Marianne buys and sells continuously throughout a single day, trading between incremental price changes in hopes of realizing a profit.

3. _____ Steve buys a futures contract of corn at a low price in Location A and simultaneously sells it at a higher rate in a Location B.