Which of the following hedging strategies involves a loan without a futures contract?

Question

Quizplus · Accepted Answer

The money market involves borrowing or lending money for short periods of time, usually less than a year, without the use of futures contracts. This can be a hedging strategy for companies or individuals who need to manage their cash flow or protect against interest rate fluctuations. The Eurobond market and IMM contracts are both related to borrowing or lending money, but they may involve futures contracts. The forward exchange market involves locking in a future exchange rate for a currency transaction, which can be a hedging strategy for foreign exchange risk but is not a loan.

Which of the Following Hedging Strategies Involves a Loan Without