Series 3: Exercise

Taken from our Series 3 Online Guide

Exercise

Please note which of the following is described below.

A. Short hedge

B. Long hedge

1. _____ An investor is long an asset and short a futures contract.

2. _____ A hedger is long the current basis.

3. _____ Hedging strategy in which strengthening basis will increase profits.

4. _____ Hedging strategy in which weakening basis will increase profits.

5. _____ Hedger has a short basis position.

6. _____ Protects against falling prices.

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