If a Is the Position in the Derivative, B Is

question 31

Multiple Choice

If A is the position in the derivative, B is the position in the underlying security, and C is a fixed- interest loan, if a player holds B and wishes to hedge her position then she can:

• A) buy A.
• B) buy C.
• C) sell C.
• D) sell A.

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Definitions:

Ming Dynasty

A major Chinese dynasty that ruled from 1368 to 1644, known for its trade expansion, flourishing of arts and literature, and the construction of the Great Wall.

Porcelain Objects

Items made from porcelain, a fine, white ceramic material known for its strength, translucency, and high resistance to chemical attack and thermal shock, used extensively for tableware and decorative arts.

Kaolin

Kaolin is a fine, white clay used in the production of porcelain and ceramics, as well as in paper making, paint manufacture, and other industrial applications due to its non-abrasive texture and color.

Stoneware

Pottery fired at high temperatures to produce a stonelike hardness and density.