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:

Ego

In psychoanalytic theory, the part of the personality that mediates demands between the id, superego, and reality; operates on the reality principle.

Oral Stage

A phase in Freudian psychosexual development where an infant's pleasure centers are in the mouth, leading to behaviors like sucking and biting.

Freud

Refers to Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Sarcastic Manner

A form of verbal irony that involves saying something in a way that means the opposite, often for humorous or emphatic effect.