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Which of the Following Statement(s) Are True

Question 26

Multiple Choice

Which of the following statement(s) are true?


A) To hedge against a rise in the value of a foreign currency, a long futures position is taken to make a gain on the futures contract to offset a spot loss.
B) To hedge against a fall in the value of a foreign currency, a short futures position is taken to make a gain on the futures contract to offset a spot loss.
C) A short futures contract is a contract to sell foreign currency in the future at the futures contract rate.
D) A long futures contract is a contract to purchase foreign currency in the future at the futures contract rate.
E) All of the above.

Correct Answer:

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