18. What is the primary advantage for a short hedger of trading a short collar versus...
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18. What is the primary advantage for a short hedger of trading a short collar versus taking the appropriate position in a futures contract (assume a hedge ratio of 1.00)? a. the short collar eliminates all price uncertainty b. the short collar allows for more upside if prices go up c. the short collar locks in a price and eliminates all price risk 19. A futures contract has an initial margin of $5000 per contract and a maintenance margin of $2500 per contract. How many contacts could a trader control with $100,000 (assuming they commit the entire $100,000). a. 100 b. 1 c. 40 d. 20 18. What is the primary advantage for a short hedger of trading a short collar versus taking the appropriate position in a futures contract (assume a hedge ratio of 1.00)? a. the short collar eliminates all price uncertainty b. the short collar allows for more upside if prices go up c. the short collar locks in a price and eliminates all price risk 19. A futures contract has an initial margin of $5000 per contract and a maintenance margin of $2500 per contract. How many contacts could a trader control with $100,000 (assuming they commit the entire $100,000). a. 100 b. 1 c. 40 d. 20
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