Cross-Hedging Can Best Be Defined As

question 118

Multiple Choice

Cross-hedging can best be defined as:

• A) A forward contract with the feature that gains and losses are realized each day rather than only on the settlement date.
• B) Hedging an asset with contracts written on a closely related, but not identical, asset.
• C) Risk that futures prices will not move directly with cash price hedged.
• D) An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
• E) An agreement that gives the owner the right, but not the obligation, to buy or sell a specific asset at a specific price for a set period of time.

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Definitions:

Roving Wiretaps

Surveillance authority that allows law enforcement to monitor communication devices used by a suspect without specifying the devices in advance.

Law Enforcement

The system by which members of society (such as police officers and agencies) are responsible for ensuring adherence to laws, maintaining public order, and preventing and investigating crimes.

Foreign Intelligence Surveillance Act

A U.S. law that establishes procedures for the surveillance and collection of foreign intelligence information between foreign powers and agents of foreign powers suspected of espionage or terrorism.

Surveillance

The monitoring of behavior, activities, or information for the purpose of information gathering, influencing, managing, or directing.