A Short Hedge Is One in Which

question 46

Multiple Choice

A short hedge is one in which

• A)the margin requirement is waived
• B)the hedger is short futures
• C)the hedger is short in the spot market
• D)the futures price is lower than the spot price
• E)none of the above

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Definitions:

Overallocated

The condition when resources, such as time, money, or materials, are assigned or committed beyond the capacity or availability.

Underallocated

refers to resources or efforts that are insufficient or less than what is needed for a particular purpose or to achieve optimal efficiency.

Marginal Cost

Marginal Cost is the cost of producing one additional unit of a product or service, a crucial concept in decision-making and pricing strategies.

Monopolist

An entity that holds exclusive control over the supply of a particular good or service, allowing them to manipulate market conditions.