What is the difference between hedging and speculating

Reference no: EM131304418

1. What is the difference between the short position and the long position in a futures market?

2. Give an example of how someone might hedge using a commodity futures and give an example of how someone might hedge using a financial futures.

3. What is the difference between hedging and speculating? Give an example of speculating using commodity futures and speculating using financial futures.

Reference no: EM131304418

Questions Cloud

Calculate plastic strains and tip displacement : When the yield stress of the material is 100 MPa, calculate plastic strains and tip displacement after removing the applied force.

What is the total sample size? : What is the total sample size? What is the mean income and mean number of hours worked? What is the correlation coefficient between the outcome and predictor variables? Is it significant? How would you describe the strength and direction of the relat..

Derive the expression of plastic strain increment : For the combined isotropic/kinematic hardening model, derive the expression of plastic strain increment from the plastic consistency condition.

Describe database backup and planning : Describe Database Backup and Planning.compare and contrast Database Backup & Disaster Planning.

What is the difference between hedging and speculating : What is the difference between hedging and speculating? Give an example of speculating using commodity futures and speculating using financial futures.

Calculate the current capital charge : Calculate the current capital charge, based on existing market value of the firm's debt and equity. Calculate the current Net Operating Profit After-taxes, as well as the Return on Invested Capital, comment on these and distinguish them from the me..

Describe ultimate goal of the product campaign for shampoo : Describe the ultimate goal of the product campaign for the new shampoo. Discuss your methods for achieving this goal. Identify the components of marketing, pricing, and distribution for the campaign.

Plot the stress strain curve by changing the applied forces : An elastoplastic bar is clamped at the left end, and variable loads are applied at the right end, as shown in the table. Plot the stress-strain curve by changing the applied forces by 5 kN increments.

What counterparty risk is involved with forward contracts : What is counterparty risk? What counterparty risk is involved with forward contracts? Why are investors and firms that enter forward contracts willing to accept counterparty risk?

User Account

All Pages