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Futures market transactions are commonly used to reduce risk. The greatest amount risk reduction can be obtained when the asset at risk and the futures

Futures market transactions are commonly used to reduce risk. The greatest amount risk reduction can be obtained when the asset at risk and the futures contract have:

Multiple Choice

different maturities.

payoff schedules that differ.

differing volatilities.

uncorrelated price movements.

Incorrect

perfectly correlated price movements.

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