The Long Financial Futures Hedger Net Loses When Futures Contracts

question 20

True/False

The long financial futures hedger net loses when futures contracts are marked to market after an increase in the price of the underlying asset.

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Definitions:

Money Supply

The sum of financial resources accessible within an economy at a given moment, encompassing cash, coins, and amounts present in both checking and savings accounts.

Government Purchases

Expenditures made by the government for goods and services that directly satisfy the needs of the community or help in the production of further goods.

Taxes

Mandatory monetary fees or different forms of charges levied on taxpayers by government entities with the purpose of financing government operations and a range of public spending.

Fiscal Policy

Government adjustments to its spending levels and tax rates to monitor and influence a nation’s economy.