The Liquidity of the Futures Contract Used in a Hedge

question 4

True/False

The liquidity of the futures contract used in a hedge is very important to the hedger.

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Definitions:

Duty Rate

The tax imposed on imports and exports, usually calculated as a percentage of the value.

Ad Valorem Duty

A type of tax based on the assessed value of an item, typically used for customs purposes.

Foreign Manufacturer

A company that produces goods in a country other than where the goods are sold or used.

Euro

The official currency of the eurozone, which is used by many of the European Union's member states.