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

question 30

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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