For years, your family has operated a business that produces lawn mowers. Over the years, the industry has progressed

For years, your family has operated a business that produces lawn mowers. Over the years, the industry has progressed and new mass production techniques have been developed. However, your firm cannot afford this new technology, nor can you compete against those firms that can. Thus, the family has decided to close its facility at the end of the year. Which one of the following describes the risks to which your family's firm succumbed?    A.  forward risk B.  volatility exposure C.  economic exposure D.  transactions exposure E.  translation risk Refer to section 23.2

6.

This morning a cereal maker agreed to pay a farmer $4.40 a bushel for 5,000 bushels of wheat that the farmer will ship to the factory four months from now. What is this legally binding agreement called?    A.  forward contract B.  spot contract C.  swap D.  exchange E.  floating contract Refer to section 23.3

7.	A graph depicting the gains and losses a seller of a forward contract would earn at various market prices is referred to as a:    A.  risk profile. B.  payoff profile. C.  risk offer line. D.  scatter plot. E.  risk-return graph. Refer to section 23.3

8.	By definition, which one of the following contracts is marked to the market on a daily basis?    A.  forward contract B.  spot contract C.  hedge D.  swap E.  futures contract Refer to section 23.4

9.	Southern Groves raises tangerines. To hedge its risk, the firm trades in the orange futures market. This process is known as:    A.  secondary trading. B.  open trading. C.  open-hedging. D.  cross-hedging. E.  perfect-hedging. Refer to section 23.4