In Cross-Hedging, If the Futures Contract Value Is ____ Volatile

question 36

Multiple Choice

In cross-hedging, if the futures contract value is ____ volatile than the portfolio value, hedging will require a ____ amount of principal represented by the futures contracts.

• A)less; greater
• B)more; greater
• C)more; smaller
• D)none of the above

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Definitions:

Price Effect

The impact that changes in price have on the consumer's choice and allocation of their income.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given period.

Determinants of Demand

Factors that influence the quantity of a product or service that consumers are willing and able to buy at a given price.

Sum of Demand Curves

The aggregate demand curve that is obtained by horizontally adding individual demand curves in a market.