In General, When Deciding Whether a Market Participant Needs to Buy

question 35

Multiple Choice

In general, when deciding whether a market participant needs to buy or sell futures contracts in order to hedge, the rule could be:

• A) buy futures if you have the underlying asset and sell futures if you need the underlying asset.
• B) sell futures if you have the underlying asset and buy futures if you need the underlying asset.
• C) buy futures if you want to speculate, sell futures if you want to hedge.
• D)buy futures if you are willing to have unlimited risk, sell futures if you want capped risk.

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Definitions:

Cam Brackets

Supports or mountings for camshafts, ensuring proper alignment and function within an engine's valvetrain.

Variable Rate Spring

A spring that provides variable resistance or support based on the applied load, offering improved handling and performance in vehicles or machinery.

Oscillation Frequency

The rate at which an object or system oscillates, usually measured in cycles per second or Hertz (Hz).

Dampen

Synonymous with damp.