Symmetric hedges use __________________,while asymmetric hedges usually use _____________________.
A)options;forwards and futures
B)currency swaps;options
C)forwards and futures;options
D)options;derivatives

Question

Quizplus · Accepted Answer

Symmetric hedges typically involve the use of forwards and futures because they provide an equal amount of protection against both upside and downside risk. Asymmetric hedges, on the other hand, usually use options because they provide more flexibility in terms of the degree of protection and the direction of the risk exposure. Currency swaps are also a type of asymmetric hedge, but they are not as commonly used as options or forwards/futures. Derivatives are a broad category that includes options, forwards, futures, and swaps, so D is not a precise enough answer.

Symmetric Hedges Use __________________,While Asymmetric Hedges Usually Use _____________________

Symmetric Hedges Use ,While Asymmetric Hedges Usually Use ___