The Two Basic Types of Hedges Involving the Futures Market

question 5

True/False

The two basic types of hedges involving the futures market are long hedges and short hedges, where the words "long" and "short" refer to the maturity of the hedging instrument.For example, a long hedge might use Treasury bonds, while a short hedge might use 3-month T-bills.

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Definitions:

Animals

Multicellular, eukaryotic organisms of the kingdom Animalia that are capable of locomotion, responsive to their environment, and feed by consuming other organisms.

Lactate

A compound produced during anaerobic metabolism, often associated with muscle fatigue.

NAD+

Nicotinamide adenine dinucleotide, a coenzyme present in all living cells that is crucial for energy metabolism and cellular functions.

ATP Molecules

Adenosine triphosphate molecules, which serve as the primary energy carrier in all living organisms, facilitating energy transfer within cells.