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:

Quantity of Money

The sum of cash and bank deposits circulating in an economy at a particular moment.

Prices

Prices are the amounts of money required to purchase goods or services, serving as a reflection of supply and demand dynamics in a market.

Opportunity Cost

The loss of what could have been earned from other possibilities when one path is taken.

College Degree

A college degree is an academic degree awarded by colleges or universities upon completion of a course of study demonstrating mastery in a specific field of study or professional practice.