Hedging in the Futures Markets Can Reduce All Risk If

question 40

Multiple Choice

Hedging in the futures markets can reduce all risk if:

• A)price movements in both the cash and futures markets are perfectly correlated.
• B)price movements in both the cash and futures markets have zero correlation.
• C)price movements in both the cash and futures markets are less than perfectly correlated.
• D)the hedge is a short hedge,but not a long hedge.
• E)the hedge is a long hedge,but not a short hedge.

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Definitions:

Treatment Option

Various methods or pathways available for the diagnosis, management, and care of health conditions.

S-shaped Curvature

A type of spinal deformity characterized by a lateral, S-like curve.

Spine

The column of vertebrae extending from the base of the skull to the tailbone, providing structural support and protecting the spinal cord.

Skull

The bony structure forming the head that protects the brain and supports the structures of the face.