Which of the Following Is True of the Tailing of the Hedge

question 2

Multiple Choice

Which of the following is true of the tailing of the hedge?

• A)Long-dated obligations hedged with short-term forward agreements need to be tailed if the underlying commitment does not have a convenience yield.
• B)The degree of tail will have no influence on convenience yield as it makes the receipt of a commodity at a future date less risky compared to receiving it now.
• C)Long-dated obligations hedged with long-term forward agreements need to be tailed if the underlying commitment does not have a convenience yield.
• D)When hedging with futures,a greater degree of tailing is needed depending on the convenience yield earned.

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Definitions:

Themes

Underlying subjects or motifs that serve as foundational elements of a story, artwork, or concept.

High School Reunion

An event where former classmates gather to reconnect and reminisce about their time spent together during high school years.

Old Friends

Long-standing relationships that often provide comfort, support, and a sense of history.

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The phenomenon where most people cannot recall personal events from the first few years of their life.