Options Generally Allow for a More Efficient Hedge Than Futures

question 24

True/False

Options generally allow for a more efficient hedge than futures.

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Definitions:

Relevant Costs

Only those costs that will be affected by a decision or action and therefore should be considered in decision-making.

Activity

In economic terms, refers to actions or engagements, such as production or consumption, within an economy.

Marginal Cost

The cost associated with the production of an extra unit of a product or service.

Value Meal

A bundled meal offered at a fast-food restaurant at a discounted price, typically including a main item, a side, and a drink.