Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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question 20 please quickly thanks !!
Transcribed Image Text:Question 20
For a farmer wishing to hedge the sale of wool in 6 months time which of the following stateme
is most accurate?
O Forward contracts provide a more effective hedge compared to optins
Forward contracts are preferable since they do not involve cash flows prior to maturity
O Options provide a more effective hedge compared to forward contracts
Options are preferable since they cannot result in a loss
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