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Clancy, a United States portfolio manager, is monitoring the investments that he made in high-risk stocks in U.S. and South Korean firms. He recognizes that
Clancy, a United States portfolio manager, is monitoring the investments that he made in high-risk stocks in U.S. and South Korean firms. He recognizes that these are high-risk investments and wants to hedge against adverse effects that may result from various types of risk. He expects that over the next year, U.S. and South Korean interest rates will increase, the U.S. stock market will perform well, the South Korean stock market will perform poorly, and the South Korean won will appreciate against the dollar. What type of position should Clancy consider taking in U.S. and South Korean bond futures to hedge his investment portfolio? Clancy should sell U.S. bond futures and buy South Korean bond futures. Clancy should buy U.S. bond futures and sell South Korean bond futures. Clancy should sell both U.S. and South Korean bond futures. Clancy should buy both U.S. and South Korean bond futures. What type of position should Clancy consider taking in U.S. and South Korean stock index futures to hedge his investment portfolio? Clancy should sell both U.S. and South Korean stock index futures. Clancy should sell U.S. stock index futures and buy South Korean stock index futures. Clancy should buy both U.S. and South Korean stock index futures. Clancy should buy U.S. stock index futures and sell on South Korean stock index futures. What type of position should Clancy consider taking in South Korean currency futures to hedge his investment portfolio? Clancy should sell South Korean won futures. Clancy should buy South Korean won futures. Clancy should not take a position on South Korean won futures.
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