Which of the Following Is the Practice of Trading an Asset

question 12

Multiple Choice

Which of the following is the practice of trading an asset for the purpose of reducing or eliminating the risk associated with some other asset?

• A) Speculating
• B) Hedging
• C) Put-call parity
• D) Insurance
• E) Fixed exchange rate

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Definitions:

Jurisdiction

The legal authority of a court or other institution to make decisions and judgments within a specific geographic area or over certain types of legal cases.

Any Person

Refers to an individual or entity that is considered a legal person under the law.

Federal Law

Legislation enacted by the national government of a country, which supersedes state laws in matters of federal jurisdiction.

Federal Question

A question that pertains to the U.S. Constitution, acts of Congress, or treaties. A federal question provides a basis for federal jurisdiction.