23-73 What Is the Advantage of a Futures Hedge Over

question 35

Multiple Choice

23-73 What is the advantage of a futures hedge over an options hedge?

• A)The futures hedge has lower credit risk exposure.
• B)The futures hedge reduces volatility in profit gains on both sides.
• C)The futures hedge is marked to market less frequently.
• D)The futures hedge offers the least downside risk protection.
• E)The futures hedge completely offsets losses but only partly offsets gains.