You Own a Diversified Investment Portfolio and Wish to Hedge

question 21

Multiple Choice

You own a diversified investment portfolio and wish to hedge it against market declines. Which one of the following would be best suited as a cross-hedge for this purpose?

• A)going long on Treasury bonds in the spot market
• B)going long on DJIA futures
• C)going short on S&P 500 index futures
• D)going long on an index fund
• E)going short on Eurodollar futures

---

Definitions:

Integrated Exchange Theory

A sociological theory that combines elements of exchange theory with systemic analyses of social interactions and networks.

Macroscopic Issues

Refers to large-scale or overarching problems and challenges that can be observed within societies or specific fields of study.

Network Analysis

A method for examining the structures and patterns of relationships or interactions between members within a network.

Social Interactions

The process through which individuals act and react to those around them, forming the basis of social relationships and structures.