Consider Hedging an Exposure with (I)a Futures Contract,or (Ii)an Option

question 2

Multiple Choice

Consider hedging an exposure with (i) a futures contract,or (ii) an option with a strike price close to the futures price.The hedge with the futures contract

• A)Has more cashflow uncertainty.
• B)Has no upfront cost.
• C)Has non-negative payoffs.
• D)Has more cashflows.

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Definitions:

Perimenopause

The transitional phase leading up to menopause, marked by changes in menstrual cycle and other symptoms due to fluctuating hormone levels.

Menarche

The first occurrence of menstruation in a female, signifying the onset of reproductive capability.

Amenorrhea

The absence of menstruation in a woman of reproductive age, which can be a symptom of various health conditions.

Menstrual Period

The phase in a woman's menstrual cycle during which bleeding from the uterus occurs through the vagina, marking the shedding of the uterine lining.