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:

Myelomeningocele

A type of spina bifida where the spinal canal and the backbone don't close before birth, resulting in damage to the spinal cord and nerves.

Hydrocephalus

A condition characterized by an abnormal accumulation of cerebrospinal fluid within the cavities of the brain, potentially causing increased pressure and swelling.

Craniostenosis

A condition characterized by the premature fusion of one or more sutures of an infant's skull, affecting skull and brain growth.

Myelomeningocele

A type of spina bifida where there is a hernia of the spinal cord and its meninges through a defect in the vertebral column.