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

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