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How Can Options, Futures, and Forward Contracts Be Used to Devise

question 9

Essay

How can options, futures, and forward contracts be used to devise simple hedging strategies?


Definitions:

Materialize

To become real or actual; in finance, it refers to the realization of expected results, risks, or events in tangible form.

Long-term Notes Payable

Liabilities or debts with a repayment period extending beyond one year, evidenced by a formal promissory note.

Floating Interest Rates

Interest rates that fluctuate over time based on the market or an index.

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