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A Company Wishes to Hedge a Cash Position with an Interest

Question 13

Multiple Choice

A company wishes to hedge a cash position with an interest rate futures contract.To do so effectively,the maturities of the cash and futures instruments should be the same,or


A) the holder of the cash position will not be able to hedge the cash position
B) the normal futures position should be reversed: if a buy hedge would have been used,a sell hedge should be used instead,and vice versa
C) the number of futures contracts can be adjusted to equal the dollar price change per basis point
D) the cash position should be adjusted to match the maturities

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