Multiple Choice
Stock specialists and OTC dealers hedge their positions with stock index futures:
A) to profit from major market movements.
B) to reduce market risk on his or her inventory.
C) to reduce the unsystematic risk on the stocks in his or her inventory.
D) More than one of the above
Correct Answer:

Verified
Correct Answer:
Verified
Related Questions
Q1: The S&P 100 Index is composed of
Q2: In a declining market, stock index futures
Q3: A combination of a futures and options
Q4: When basis increases with the passage of
Q5: Stock index futures contracts are limited to
Q7: Futures provide a more efficient hedge than
Q8: A perfect hedge using stock index futures
Q9: Investing in stock index futures is one
Q10: When the portfolio manager wants to hedge
Q11: Stock index futures provide the portfolio manager