Which of the Following Statements Is (Are) Correct About the Reasons

question 24

Multiple Choice

Which of the following statements is (are) correct about the reasons why hedging is difficult to do perfectly?
I.Available futures contract sizes may not match the hedging needs of the firm.
II. There may be a change in the relationship between the futures price and the local spot price.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

---

Definitions:

Babbling

A stage in child language acquisition where the child produces sounds of language without semantic meaning, often a precursor to true speech.

Months

Units of time in calendars that approximate the period required for the moon to orbit the earth, roughly 30 days.

Critical Period

An optimal period early in the life of an organism when exposure to certain stimuli or experiences produces normal development.

Built-in Predisposition

Refers to innate tendencies or inclinations present at birth that influence future behavior or development.