Multiple Choice
Which of the following is not true regarding using an option to hedge financial risks versus a forward contract?
A) An option is a right to buy or sell an underlying, while a forward contract is an obligation.
B) An option requires an initial cash outlay, while a forward contract does not.
C) Both options and forwards are said to have asymmetric or one-sides return profiles.
D) All of the above are true.
Correct Answer:
Verified
Correct Answer:
Verified
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