Question: A long hedge using a futures contract is appropriate when a firm has made some forecasts regarding the price of the underlying asset. Which of

A long hedge using a futures contract is appropriate when a firm has made some forecasts regarding the price of the underlying asset. Which of the following statements is the most accurate?

A. The price of the underlying asset will increase in the future and the firm expects to purchase the underlying asset in the future.

B. The price of the underlying asset will increase in the

future and the firm expects to sell the underlying asset in

the future.

C. The price of the underlying asset will decrease in the

future and the firm expects to purchase the underlying

asset in the future.

D. The price of the underlying asset will decrease in the

future and the firm expects to sell the underlying asset in the future.

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