Hedging One Commodity by Using a Futures Contract on Another

question 23

Multiple Choice

Hedging one commodity by using a futures contract on another commodity is called

• A) surrogate hedging.
• B) cross hedging.
• C) alternative hedging.
• D) correlative hedging.
• E) proxy hedging.

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Definitions:

Universal Donor

Refers to a person with O negative blood type, whose blood can be transfused into persons of any other blood type in emergency situations.

Type O

A blood group in the ABO system characterized by the absence of A and B antigens on red cells and the presence of anti-A and anti-B antibodies in the plasma.

Universal Recipient

An individual with Type AB positive blood, who in theory can receive blood of any type in transfusions due to the absence of anti-A or anti-B antibodies.

Type AB

A blood group in the ABO blood type system characterized by the presence of both A and B antigens on the surface of red blood cells.