Suppose you are holding a stock position and wish to hedge it. What forward contract would you

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Suppose you are holding a stock position and wish to hedge it. What forward contract would you use, a long or a short? What option contract might you use? Compare the forward versus the option on the following three criteria:

(a) Uncertainty of hedged position cash flow,

(b) Up-front cash flow,

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Derivatives Principles And Practice

ISBN: 9780078034732

2nd Edition

Authors: Rangarajan Sundaram

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Question Posted: Jan 04, 2024 06:44 AM

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Suppose you are holding a stock position and wish to hedge it. What forward contract would you

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If a forward contract is to be used then a short forw...View the full answer

Derivatives Principles And Practice

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