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In Cross-Hedging, If the Value of the Futures Contract Is

Question 3

Multiple Choice
In cross-hedging, if the value of the futures contract is more volatile than the portfolio's value, the amount of principal represented by the futures contracts will be ____ the market valueofthe portfolio to be hedged.

In cross-hedging, if the value of the futures contract is more volatile than the portfolio's value, the amount of principal represented by the futures contracts will be ____ the market valueofthe portfolio to be hedged.


A) smaller than
B) greater than
C) equal to
D) B and C are both possible

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