Series 3: Exercise

Exercise

Please note which of the following is described below.

1. A. Short hedge
2. B. Long hedge
3. 1. _____ An investor is long an asset and short a futures contract.
4. 2. _____ A hedger is long the current basis.
5. 3. _____ Hedging strategy in which strengthening basis will increase profits.
6. 4. _____ Hedging strategy in which weakening basis will increase profits.
7. 5. _____ Hedger has a short basis position.
8. 6. _____ Protects against falling prices.
9. 7. _____ Reduces risk of being short an asset.
10. 8. _____ I