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Exit VCEDump IIA-CIA-PART2 Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement

Q90 Single choice

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?

A
Enter into long-term gasoline purchase agreements with end customers.
B
Trade crude oil derivatives at financial markets in order to benefit from price fluctuations
C
Purchase crude oil-related derivatives such as futures or options.
D
Stock as much raw materials as possible and consider investing into additional facilities.

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