If a Futures Contract Is More Volatile Than the Portfolio

question 75

Multiple Choice

If a futures contract is more volatile than the portfolio value, the amount of principal represented by the futures contracts to hedge the portfolio is ____ the market value of the securities to be hedged.

• A)smaller than
• B)greater than
• C)equal to
• D)B and C are both possible

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Definitions:

Accommodating

The act of adjusting one's behavior or decisions to suit another's needs, preferences, or demands.

Machiavellian

Characterized by cunning, strategic manipulation, and a focus on self-interest and personal gain.

Conventional Morality

A stage of moral development where individuals adhere to rules and conventions of society to maintain order and relationships.

Lasting Relationships

Enduring bonds between individuals, characterized by mutual affection, respect, and a commitment to one another over time.