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If a Hedger Is Owns the Underlying Security, He Will

question 19

True/False

If a hedger is owns the underlying security, he will be long the futures position.


Definitions:

Reserve Requirements

Regulations set by central banks that determine the minimum amount of reserves a bank must hold against deposits, affecting the money supply.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance government spending, including bonds, bills, and notes.

Open Market

A freely competitive market in which any buyer or seller may participate and where transactions are not restrictively regulated by government.

Interest Rates

The percentage of a loan that is charged to the borrower as interest, usually presented as an annual rate of the remaining loan balance.

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