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The Primary Difference Between an Entity Trying to Hedge Interest

Question 11

Multiple Choice

The primary difference between an entity trying to hedge interest rate risk versus a speculator in that same financial futures contract is that the hedger is


A) trying to protect a present or anticipated cash position
B) trying to profit from interest rate movements
C) trying to guess what the interest rates will be at the expiration of the contract
D) trying to use the contract to avoid taxes

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