An Investor in a Hedge Position Is No Longer Exposed

question 57

True/False

An investor in a hedge position is no longer exposed to the absolute price movement of the underlying asset, but the investor is still exposed to basis risk.

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Definitions:

Zoophilia

A sexual interest characterized by an attraction to animals other than humans.

Sexual Pleasure

The physical and/or emotional satisfaction derived from sexual activities or thoughts.

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia or Metazoa, characterized by their ability to move voluntarily and consume organic material.

Exhibitionism

A paraphilia characterized by the recurrent urge or behavior to expose one's genitals to an unsuspecting person for sexual pleasure.