Derivatives Can Be Used to Either Hedge or Speculate

question 17

Multiple Choice

Derivatives can be used to either hedge or speculate. These actions:

• A) increase risk in both cases.
• B) decrease risk in both cases.
• C) spread or minimize risk in both cases.
• D) offset risk by hedging and increase risk by speculating.
• E) offset risks by speculating and increase risk by hedging.

---

Definitions:

Presumed Damages

Damages assumed by law to have occurred from a wrongful act, without the need for proof of loss or injury.

Actual Injury

A tangible harm or damage that an individual suffers, which can be physical or financial in nature.

Absolute Privilege

A complete defense in defamation cases, where certain acts cannot be sued for defamation irrespective of the intent or truthfulness, typically seen in parliamentary and judicial proceedings.

Defamatory Statement

A false communication that injures a person's reputation, exposing them to public contempt, ridicule, aversion, or disgrace.