Which of the Following Measures the Dollar Value of Futures

question 25

Multiple Choice

Which of the following measures the dollar value of futures contracts that should be sold per dollar of cash position exposure?

• A)Hedge ratio.
• B)Open position.
• C)Implied volatility.
• D)Payoff.

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Definitions:

Residual Value

The estimated amount that an asset is expected to realize at the end of its useful life.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation expense for an asset over its useful life.

Depreciation Rate

The rate at which an asset is depreciated over a specified period, often expressed as a percentage of its original cost.

Revaluation

The process of adjusting the book value of an asset or liability to reflect its current fair market value.