Suppose you are the Chief Financial Officer of Tea Time Inc. and you need to purchase...

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Suppose you are the Chief Financial Officer of Tea Time Inc. and you need to purchase a large quantity of Tea each month. You are concerned that the price of Tea will be higher next month due to a supply chain problem reported in the news. Your company wants to guarantee that your Tea will not cost more than $2.80 per pound. You manage to lock in a price of $2.80 per pound. If the price of Tea turns out to be $2.65 per pound in one month, would you regret your decision? Suppose you are the Chief Financial Officer of Tea Time Inc. and you need to purchase a large quantity of Tea each month. You are concerned that the price of Tea will be higher next month due to a supply chain problem reported in the news. Your company wants to guarantee that your Tea will not cost more than $2.80 per pound. You manage to lock in a price of $2.80 per pound. If the price of Tea turns out to be $2.65 per pound in one month, would you regret your decision?

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Considering the situation even though the actual price of Tea ended up being lower than the lockedin ... View the full answer