IIA
IIA-CIA-PART2 · Question #154
IIA-CIA-PART2 Question #154: Real Exam Question with Answer & Explanation
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Question
An organization buys crude oil on the open market and refines it into a high-quality gasoline. The price of crude oil is extremely volatile. Which of the following is the most appropriate risk management technique to protect the organization against these price fluctuations?
Options
- AEnter into long-term gasoline purchase agreements with end customers.
- BTrade crude oil derivatives at financial markets in order to benefit from price fluctuations
- CPurchase crude oil-related derivatives such as futures or options
- DStock as much raw materials as possible and consider Investing into additional facilities
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