Futures Market Transactions Are Used to Reduce Risk

question 1

Multiple Choice

Futures market transactions are used to reduce risk.Risk may not be totally offset if:

• A)the two instruments have different maturities.
• B)payoff schedules of the two instruments are different.
• C)the volatility of the two instruments are different.
• D)the price movements are not perfectly correlated.
• E)All of the above.

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