A ﬁnance professor tells you that the mark-to-the-market provision on futures contracts makes the future a better hedging instrument than the forward.She also tells you, however, that this is especially the case if the future is perfectly correlated with the underlying asset you are trying to hedge.Explain the professor's reasoning.

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The Answer of A ﬁnance professor tells you that the mark-to-the-market provision on futures contracts makes the future a better hedging instrument than the forward.She also tells you, however, that this is especially the case if the future is perfectly correlated with the underlying asset you are trying to hedge.Explain the professor's reasoning.

A ﬁNance Professor Tells You That the Mark-To-The-Market Provision on Futures