ABM 100 Final Exam

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If the farm share of the food dollar is decreasing, then farming is becoming less profitable
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False
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Institutional wholesalers typically do not sell to food service retailers
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False
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Approximately 40% of all jobs in the U.S. are related to some aspect of the agri-food system
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False
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There is an increasing trend in both the Food Bill and the Food Marketing Bill
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True
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The farm share of the food dollar has been decreasing over time
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True
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Most food products go through ten to twelve changes of possession before they reach the final consumer
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False
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Holding everything else constant, if the farm price of milk doubles, then one would expect the retail price of ice cream to more than double
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False
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Value-added is the difference between the cost of goods purchased by a firm and the price for which the firm sells those enhanced goods
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True
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Fresh produce and dairy products are the most common sources of food borne illnesses
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True
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Despite its northern climate, Michigan is still able to grow many different commodities and is one of the most agriculturally diverse states in the U.S.
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True
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According to the ERS, the farm share of the food dollar has been less than 16 cents of the dollar since 2000
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True
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Less than 25% of the land in the U.S. is used to produce food and fiber
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False
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Processors tend to locate their facilities near agricultural production regions
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True
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Both the demand for food products and the supply of food products are relatively stable throughout the year
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False
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Over the next twenty years, dairy products are projected to be one of the food categories that experience a decrease in per capita consumption
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True
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There is an increasing trend in real (inflation adjusted) retail food prices
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True
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Increasing incomes are leading to more emphasis placed on products price and less emphasis placed on food quality attributes
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False
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Approximately 1 out of every 2 meals is consumed away from home
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False
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The U.S. food market is considered a “mature” market which means that growth in the food market will come from older Americans eating more food
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False
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There is very little quality variation in fruits and vegetables
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False
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HRI is a common acronym used in the agri food system to describe hotels, restaurants and institutions
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True
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Annual expenditures on food and alcohol in the U.S. are approximately $160 trillion
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False
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In general, a food item that is highly perishable, like milk or eggs, will likely have a larger farm share of the food dollar than one that is highly processed
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True
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On average, Americans spend less than 10% of their income on food
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True
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The share of food expenditures for meals consumed at home in approximately 33%
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False
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The average food product travels less than 1000 miles before it reaches the final consumer
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False
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If a new government regulation increases the cost of producing soybeans, then one would expect to see a new market equilibrium with a lower price and a higher quantity of soybeans being traded in the market
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False
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Increased globalization has led to an increase in the value of many U.S. raw agricultural commodities and food products
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True
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An increase in the price of apples will shift the supply curve for apples
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False
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The U.S. is the worlds largest exporter of wheat
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True
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Two players who are not involved with marketing in the agri-food system are the agricultural int supplier and the processor
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False
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Increase globalization in the agri-food system has led to an increase in the variety and availability of agricultural and food products in the U.S.
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True
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The U.S. exports as much as 50% of its agricultural production
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False
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In the future, there will be less emphasis placed on food quality attributes and more emphasis placed on price when purchasing food products in the U.S.
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False
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A salesperson who spends tine explaining the benefits if her product to her customers is adding time value
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False
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The food manufacturer primarily sells product to the processor
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False
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The EU-28 is one of the top four export destinations for U.S. agricultural products
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False
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Canada, Mexico, and China are all in the top four export destinations and import sources for U.S. agricultural and food exports
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True
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On average, the majority of the value added to a food product occurs after the product has left the farm
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True
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The primary customer of the agricultural input supplier is the food manufacturer
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False
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Farms are shifting away from production of homogenous commodities towards production of commodities with specific end-use attributes
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True
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If ice cream and popsicles are substitutes, one would expect that a decrease in the price of ice cream would cause the demand for popsicles to increase
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False
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A potential benefit to consumers of market concentration in the agri food system is that larger firms may be able exercise market power
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False
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Japan has typically been one of the top four export destinations for U.S. agricultural and food exports
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True
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Most farms in the U.S. are considered non-family farms
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False
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In the 20th century, labor was the primary driver of increased agricultural productivity at the farm level
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False
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The clustering of fruit production and processing in the Traverse Bay area is an example of market concentration in the agri-food system
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False
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Is a surplus exists in the market, then there is downward pressure on price
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True
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The goal of a hedger is to buy and sell high when trading in the commodity futures market
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False
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The laws of sup,y and demand do not apply to futures markets, since actual goods are not physically traded in futures markets
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False
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Price determination is the interaction of the broad forces of supply and demand which establish the market price level
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True
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In the movie Trading Places, the Duke Brothers lose money by hedging in the frozen orange juice concentrate futures market
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False
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A producer will always make more money if he or she hedges than if he or she did not hedge
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False
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Less than 5% of all futures contracts typically result in actual delivery
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True
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A person can sell a futures contact without being in physical possession of the commodity
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True
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When individuals who want to trade future deposits funds with a brokerage firm in a margin account, typically only 5% of the overall value of the trade must be deposited
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True
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Increase in agricultural output often lead to decrease in farm revenues because the demand for agricultural products is relatively inelastic
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False
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If the quantity demanded of hot dogs at the Breslin Center decrease by 2.5% when the price increases by 4%, then the elasticity of demand for hot dogs at the Breslin center is -1.6
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False
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Is the supply of a product increase and the demand for that product is elastic, the total revenue of the producers will decrease
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False
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If baby-boomers are more responsive to milk proc changes than college students, then it is likely that the elasticity of demand for milk is more elastic for baby-boomers than it is for college students
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True
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If the elasticity of demand for apples is equal to -0.50, then a 10% increase un the price of apples will result in a 5% decrease in the quantity demanded of apples
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True
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Starbucks estimates that the price elasticity for its coffee is -1.2. Therefore, if Starbucks decrease the price of its coffee by 10%, then the quantity demanded will increase by 12% and Starbucks total revenue will increase
answer

True
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Income elasticities are typically larger for necessities than they are for luxuries
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False
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Most food products have an income elasticity between 0 and +1.0
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True
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The more inelastic demand is, the smaller the change in price when supply changes
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False
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The more inelastic demand is, the larger the change in quantity when price changes
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False
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In general, the more substitutes a food product has, the smaller the elasticity of demand
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False
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In general, the greater a food products share is of the consumer budget, the greater the elasticity of demand for that product
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True
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The majority of the states in the U.S. place at least a small tax on food purchased for at-home consumption
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False
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A tax on one good will impact the demand for that good’s substitute
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True
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Taxation as a policy tool may be used to influence customer buying choices
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True
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Since Michigan does not have a state grocery tax on food, this means that food purchased at restaurants and bars is not taxed in Michigan
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False
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The U.S. food industry is one of the least regulated consumer products industries
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False
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Michigan has a general state sales tax of 6.0%
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True
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Futures markets allow price risk to be shifted from speculators to hedgers
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False
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The larger the income elasticity, the greater the shift in demand curve given a change in income
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True
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If the demand for orange juice is inelastic, then total revenue in the orange juice market will increase as prices decreases
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False
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Most food products have an income elasticity greater than 1.0
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False
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Most of the people who trade on the commodity futures market are speculators
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True
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In a cash market, pricing and product delivery occur at nearly the same time
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True
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Assuming no broker fees, if a speculator buys a wheat futures contract at 495’2 per bushel and later sells a wheat future contract at 465’0 per bushel, he/she had made a profit of $0.3020 cents per bushel
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False
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If a 10% increase in the price of green eggs leads to a 12% decrease in the quantity demanded of ham, then green eggs and hams are compliments
answer

True
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A speculator neither owns or intends to own the commodity in the futures contract
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True
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If the supply curve for fish is perfectly inelastic, then an increase in demand will result in an increase in the quantity traded in the market, but there will be no change in price
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False
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The size of movement along a demand curve caused by a shift in supply would be measured by the elasticity of supply
answer

False
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Assume that the cross-price elasticity of demand for bacon with respect to the price of eggs is -2.0. This implies that a 4% increase in the price of eggs will cause the quantity demanded of bacon to decrease by 8%
answer

True
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Futures markets allows farmers to receive the highest price possible for their crops
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False
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If the elasticity of demand for cheese is equal to -0.50. then a 5% increase n the price of cheese will result in an 10% decrease in the quantity demanded of cheese
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False
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If the short-run elasticity of supply for coffee is +.45, then it is possible that the long-run elasticity of supply for coffee could be +.75
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True
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The elasticity of demand for most food products is negative and elastic
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False
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Typically, 20-25% all trades made in the commodity futures market will result in actual delivery of the commodity
answer

False
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Futures markets are used by speculators to reduce price risk
answer

False

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