Hedging in a Futures Market Does NOT Have Which of the Following

question 16

Multiple Choice

Hedging in a futures market does NOT have which of the following features?

• A) Hedging protects against adverse price swings.
• B) Hedging requires that the spot and the futures prices are positively correlated.
• C) Hedging can protect (one's investment or an investor)against loss by making balancing or compensating contracts or transactions.
• D) Hedging requires no payment between counterparties due to futures having zero initial value.
• E) Hedging protects against the downside but allows you to benefit from the upside.

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Definitions:

Plagiarism

The act of using someone else's work or ideas without proper attribution, presenting them as one's own.

Grammatical Structure

The arrangement of words and phrases to create well-formed sentences in a language, following specific rules and conventions.

Timetable

A schedule outlining the times at which certain events or activities are intended to occur.

Informal Report

A less structured report, often used for internal communication, characterized by personal tone, simplicity, and directness.