A Disadvantage of Real Asset Hedges Is That ______

question 40

Multiple Choice

A disadvantage of real asset hedges is that ______.

• A) bid-ask spreads can be large
• B) daily marking to market can cause cash flow mismatches
• C) option premiums can be large
• D) they are unlikely to be zero-NPV transactions
• E) they come in only a limited number of currencies and maturities

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Definitions:

The Netherlands

A country located in Northwestern Europe, known for its flat landscape, extensive waterways, windmills, tulips, and cycling routes.

Suicide Rates

A rephrased measure indicating the frequency of suicide occurrences in a specified population, usually presented as the amount of suicides per unit of population over a given time frame.

Western Asia

A region covering the westernmost part of Asia, including countries such as Saudi Arabia, Turkey, and Iran.

North America

A continent located in the Northern Hemisphere, mostly in the Western Hemisphere, including countries such as the USA, Canada, and Mexico.