Hedging:
A) is a way to reduce your accounts receivable collection period.
B) increases risk.
C) is a non-binding agreement to buy or sell a financial futures contract.
D) can be carried out with a futures contract.

Question

Quizplus · Accepted Answer

Hedging can be carried out with a futures contract, which allows an individual or business to protect against price fluctuations in a particular commodity or financial instrument. Hedging helps to reduce risk and potential losses, making it a useful tool for investors and businesses alike. A, B, and C are unrelated to the definition or practice of hedging.