In relation to hedging when the short futures position is combined with the long asset position,the net effect is that wealth is not altered with changes in price.

Question

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Hedging with a short futures position combined with a long asset position is designed to protect against potential losses from price changes. By holding both positions, the gains or losses in one position are offset by losses or gains in the other position. As a result, the net effect is that wealth remains unchanged with changes in price.

In Relation to Hedging When the Short Futures Position Is