Which of the following is NOT an advantage of using futures contracts to hedge an exposure compared to using forward contracts to hedge the same exposure?
A) Futures hedges are easier to unwind.
B) Futures have very low transaction costs.
C) Futures offer greater flexibility in terms of contract features.
D) Futures generally have more liquid markets.
E) Futures generally offer greater efficiency.
Correct Answer:
Verified
Q39: 'Marking to market' refers to the valuation
Q40: The BAB futures contract traded on the
Q41: Price discovery performed by the futures market
Q42: The ASX futures market:
A)now only trades financial
Q43: Futures and forward contracts are both:
A)standardised
B)agreements to
Q45: A bank can hedge an exposure to
Q46: A borrower can hedge against adverse movements
Q47: A speculator who forecasts an unexpected fall
Q48: The manager of a diversified equity portfolio
Q49: Hedging with futures generally involves basis risk.
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents