Sometimes Spreading Has an Advantage Over Hedging to Lower Risk

question 84

Multiple Choice

Sometimes spreading has an advantage over hedging to lower risk because:

• A)It can be difficult to find assets that move predictably in opposite directions
• B)It is cheaper to spread than hedge
• C)Spreading increases expected returns, hedging does not
• D)Spreading does not affect expected returns

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Definitions:

Erectile Structure

A body part capable of becoming erect or rigid through the engorgement of blood vessels, often used in reference to parts of the reproductive system.

Glans Penis

The sensitive bulbous structure at the distal end of the penis.

Vulva

The external part of the female genital organs, including the labia majora, labia minora, clitoris, and the openings of the vagina and the urethra.

Labia Majora

The outer folds of skin framing the vulva, which contain sweat and oil-secreting glands, providing protection to the female genitalia.