A Hedge in Which the Asset Underlying the Futures Is

question 51

Multiple Choice

A hedge in which the asset underlying the futures is not the asset being hedged is

• A)a cross hedge
• B)an optimal hedge
• C)a basis hedge
• D)a minimum variance hedge
• E)none of the above

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Definitions:

Firm Should

Advises or considerations regarding strategic decisions that businesses ought to follow to achieve objectives such as profitability, growth, or sustainability.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Maximum Willingness

The highest amount an individual or entity is ready to pay for a good or service.

Individual Pays

A principle where the cost of a service or good is borne by the individual who consumes or uses it, rather than by society or an organization.