Multiple Choice
When a futures contract is used to hedge a position where either the portfolio or the individual financial instrument is not identical to the instrument underlying the futures, it is called ________.
A) perfect hedging.
B) a cross instrument.
C) cross hedging.
D) an hedged instrument.
Correct Answer:
Verified
Correct Answer:
Verified
Q10: If interest rate futures are _, institutional
Q11: A long hedge is used to protect
Q12: A thrift or commercial bank wants to
Q13: Suppose that a pension fund manager knows
Q14: Because futures are highly leveraged and transactions
Q16: Institutional investors can use stock index futures
Q17: Interest rate options or options on interest
Q18: The decision on how to divide funds
Q19: In regards to hedging, which of the
Q20: Investors can use stock index futures to