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:

Coagulating Agents

Substances that promote the clotting or aggregation of particles, especially in the context of water treatment or blood clotting.

Chemical Method

A technique or process involving chemical reactions to achieve a specific result, such as in manufacturing, analysis, or treatment.

Oil Tanker

A large ship designed for the transportation of oil in bulk, playing a critical role in the global oil industry's logistics.

ExxonMobil

An American multinational oil and gas corporation, one of the world's largest publicly traded energy providers and chemical manufacturers.