IIA Exam IIA-CFSA Topic 5 Question 68 Discussion

Actual exam question for IIA's IIA-CFSA exam

Question #: 68
Topic #: 5

End users need to hedge the prices at which they can purchase these commodities for instance:

AA University might want to lock in the price at which it purchases electricity to supply its air conditioning units for upcoming summer months

BAn airline wants to lock in the price of the jet fuel it needs to purchase in order to satisfy the peak in seasonal demand for travel

CA cotton producer wants to hedge his exposure to changes in the price of fertilizers or his end product (cotton)

DOnly A and B

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Suggested Answer: D

by Queen at Dec 10, 2024, 11:20 AM

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2 days ago

I think the correct answer is D. Both A and B are examples of end users hedging their commodity prices.

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