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CIPS Exam L5M2 Topic 4 Question 60 Discussion

Actual exam question for CIPS's L5M2 exam
Question #: 60
Topic #: 4
[All L5M2 Questions]

A financial instrument used by airlines to fix the price of fuel over a period of time is known commonly as a what?

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Suggested Answer: B

This is a 'swap' and is explained on p.94. This is a type of 'hedging' but there is no such thing as 'a hedge'. For a more in-depth look at Swaps see: https://www.mercatusenergy.com/blog/bid/77634/an-introduction-to-airline-fuel-hedging-strategies-swaps


by Leonora at Jul 31, 2025, 08:36 AM

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Theodora
16 days ago
I agree with Albina, hedging makes sense for airlines to manage fuel costs.
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Albina
17 days ago
I think the answer is D) hedge.
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Eric
26 days ago
I'm pretty sure it's D) hedge. Airlines use fuel hedges to manage their fuel costs and budget more effectively.
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