Bank customers traditionally trade commodity futures with banks in order to achieve which of the following goals?

Bank customers traditionally trade commodity futures with banks in order to achieve which of the following goals?

I. To express their own price views

II. To reverse undesired short-term exposure created from fixed commodity sales

III. To reach short-term budgetary targets
A . I
B . II
C . I, III
D . I, II, III

View Answer

Answer: D

Explanation:

Bank customers trade commodity futures for various reasons including expressing their own price views, reversing undesired short-term exposure from fixed commodity sales, and reaching short-term budgetary targets.

Each of these goals involves managing price risk or speculative opportunities, which are fundamental uses of futures contracts in commodity markets.