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109
Which of the following describes tailing the hedge?
A.A strategy where the hedge position is increased at the end of the life of the hedge
B.A strategy where the hedge position is increased at the end of the life of the futures contract
C.A more exact calculation of the hedge ratio when forward contracts are used for hedging
D.None of the above
A.A strategy where the hedge position is increased at the end of the life of the hedge
B.A strategy where the hedge position is increased at the end of the life of the futures contract
C.A more exact calculation of the hedge ratio when forward contracts are used for hedging
D.None of the above
Answer: D
Tailing the hedge is a calculation appropriate when futures are used for hedging. It corrects for daily settlement
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015