Finace-An anticipatory hedge is one in which

| January 30, 2017

Question
An anticipatory hedge is one in which
Answer
a. the basis is expected to fall
b. the hedger expects to make a profit on the futures
c. the spot position will be taken in the future
d. all of the above
e. none of the above

A strengthening of the basis means
Answer
a. the spot price rises more than the futures price
b. the futures price falls more than the spot price
c. a short hedger benefits
d. all of the above
e. none of the above

A hedge in which the asset underlying the futures is not the asset being hedged is
Answer
a. a cross hedge
b. an optimal hedge
c. a basis hedge
d. a minimum variance hedge
e. none of the above

When the futures expires before the hedge is terminated and the hedger moves into the next futures expiration, it is called
Answer
a. spreading the hedge
b. rolling the hedge forward
c. optimally weighting the hedge
d. all of the above
e. none of the above

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