If one cannot create a perfect hedge, what are the alternatives? Give an example to explain your

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If one cannot create a perfect hedge, what are the alternatives? Give an example to explain your answer.

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An Introduction to Derivative Securities Financial Markets and Risk Management

ISBN: 978-0393913071

1st edition

Authors: Robert A. Jarrow, Arkadev Chatterjee

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Question Posted: Dec 02, 2015 03:19 AM

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If one cannot create a perfect hedge, what are the alternatives? Give an example to explain your

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A perfect hedge cannot be set up when 1 a futures contract does not trade on the commodity being hedged 2 even if a futures contract trades on the commodity being hedged date of maturity or contract s...View the full answer

An Introduction to Derivative Securities Financial Markets and Risk Management

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