Which of the Following Is a Reason for Hedging a Portfolio

question 12

Multiple Choice

Which of the following is a reason for hedging a portfolio with an index futures?

• A) The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market
• B) The investor believes the stocks in the portfolio will perform better than the market and the market is expected to do well
• C) The portfolio is not well diversified and so its return is uncertain
• D) All of the above

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Definitions:

Cardiovascular Benefits

Positive effects on the heart and blood vessels, typically resulting from regular exercise, healthy diet, and avoidance of harmful behaviors.

Cognitive Benefits

The positive effects on the brain's function, including improved memory, attention, and problem-solving capabilities, often resulting from engaging in physical, social, or mental challenges.

Types of Diabetes

Categories of diabetes, primarily including Type 1 (where the body does not produce insulin), Type 2 (characterized by insulin resistance), and gestational diabetes (occurring during pregnancy).

Psychological Benefits

The positive effects on mental health and well-being that can result from various activities or treatments.