Why corporations buy and sell futures contracts

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1)The government of a developing nation has just announced plans to nationalize all oil company that operate within its borders. How are investors interested in investing in this country likely to react?

A) It is likely that investors would never know the difference

B)It will likely have little impact

C)It will likely increase to flow of capital into the country

D)It will likely decrease the flow of capital into the country

2) What is the main reason why corporations buy and sell futures contracts?

A) To make a profit from the price movement of the underlying commodity

B) As a hedging strategy to manage risks associated with the business

C) To speculate in markets not associated with the business

D) To find a use for extra cash on hand inside the business

Reference no: EM133124388

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