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You Own a Diversified Investment Portfolio and Wish to Hedge

question 21

Multiple Choice

You own a diversified investment portfolio and wish to hedge it against market declines. Which one of the following would be best suited as a cross-hedge for this purpose?


Definitions:

Range

The difference between the highest and lowest values in a dataset, indicating the spread of the data.

Variability

A statistical measure that describes the dispersion or spread of data points in a data set.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points around their mean.

Mean Deviation

The average deviation for all scores from the mean of a distribution, calculated as the sum of the absolute value of the scores’ deviations from the mean divided by the number of scores.

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