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Consider Hedging an Exposure with (I) a Futures Contract, or (Ii)

Question 2

Multiple Choice

Consider hedging an exposure with (i) a futures contract, or (ii) an option with a strike price close to the futures price. The hedge with the futures contract


A) Has more cashflow uncertainty.
B) Has no upfront cost.
C) Has non-negative payoffs.
D) Has more cashflows.

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