Because of differences in the units of trading,investors may not be able to completely hedge their positions.

Question

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Different units of trading refer to the different denominations or quantities in which a financial asset is traded. For example, stocks may be traded in lots of 100 shares, while currencies may be traded in units of 1,000, 10,000, or 100,000. Due to these differences, it may be difficult or even impossible to completely hedge a position in one asset with another asset traded in a different unit.

Because of Differences in the Units of Trading,investors May Not