Multiple Choice
A hedge ratio can be computed as
A) profit derived from one futures position for a given change in the exchange rate divided by the change in value of the unprotected position for the same exchange rate.
B) the change in value of the unprotected position for a given change in the exchange rate divided by the profit derived from one futures position for the same exchange rate.
C) profit derived from one futures position for a given change in the exchange rate plus the change in value of the unprotected position for the same exchange rate.
D) the change in value of the unprotected position for a given change in the exchange rate plus by the profit derived from one futures position for the same exchange rate.
Correct Answer:
Verified
Correct Answer:
Verified
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