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:

Confederacy

Historically refers to the Confederate States of America, a coalition of southern states that seceded from the United States from 1861 to 1865 during the Civil War.

Battle at Antietam

A significant battle during the American Civil War, known for being one of the bloodiest single-day battles in American history, occurring on September 17, 1862.

Emancipation Proclamation

An executive order issued by President Abraham Lincoln on January 1, 1863, declaring the freedom of all slaves in Confederate territory.

Lincoln's Position

Abraham Lincoln's stance or policy, particularly known for his leadership during the Civil War and his efforts to abolish slavery.