You have learned about a number of ways of reducing risk, specifically hedging, insuring, and diversifying. In the table below, place an X in the cell for the technique being used to reduce risk.

You have learned about a number of ways of reducing risk, specifically hedging, insuring, and diversifying. In the table below, place an X in the cell for the technique being used to reduce risk.

You
have learned about a number of ways of reducing risk, specifically hedging,
insuring, and diversifying. In the table below, place an X in the cell for the
technique being used to reduce risk.

Hedging

Insuring

Diversifying

1

Placing
an advance order with Amazon.ca, which agrees to charge you the lower of the
advance price, and the price at the time your order is filled.




2

Purchasing
a call option on a stock you think may go up in price.




3

Selling
200 shares of IBM and buying a mutual fund that holds the same stocks as the
S&P index.




4

Selling
a debt owed to you for $.50 per dollar owed.




5

Agreeing
to a long-term contract with a supplier at a fixed price.




6

Agreeing
to a no-trade clause with the sports team that employs you.




7

Buying
a Mac and a PC.




8

Paying
a clown to perform for your child’s birthday party six months




Price: £ 45

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