Which of the following is an advantage of hedging with options instead of forward contracts?
A) Options prices tend to be lower than forward prices.
B) If the price moves in the opposite direction to the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option.
C) If the price moves in the direction of the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option.
D) Options allow investors to purchase a forward contract at a later date.
B
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In the U.S. balance of payments, exports to Europe are recorded as a
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A lighthouse that serves a dangerous coastal area is built. The lighthouse cost $2 million to build and serves 200 ships a month
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When real GDP is in equilibrium with no government and no international trade
A) real planned investment spending equals real planned saving. B) real planned investment equals real planned consumption spending. C) unplanned inventories are increasing. D) unplanned inventories are decreasing.
If the null hypothesis states H0 : E(Y) = µY,0, then a two-sided alternative hypothesis is
A) H1 : E(Y) ? µY,0. B) H1 : E(Y) ? µY,0. C) H1 : < µY,0. D) H1 : E(Y) > µY,0.