Question 19

The spread between market price and futures prices of underlying asset becomes smaller and smaller, when

Maturity becomes smaller and smaller

When maturity becomes larger and larger

Both A and B

none of the above

Question 20

Perfect hedge means

Buyer of the underlying asset will receive the locked-in price.

Seller of the underlying asset will pay the locked-in price.

O Both 1 and 2

None of the above