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Suppose a dealer is receiving the floating rate and paying the fixed rate in a 2-year commodity swap. The dealer could best hedge this position
Suppose a dealer is receiving the floating rate and paying the fixed rate in a 2-year commodity swap. The dealer could best hedge this position by taking...
| a. | long positions in the 1-year and 2-year forward contracts on this commodity. | |
| b. | short positions in the 1-year and 2-year forward contracts on this commodity. | |
| c. | a long position in the 2-year forward contract only. | |
| d. | a short position in the 1-year forward contract, and a long position in the 2-year forward contract. | |
| e. | a long position in the 1-year forward contract, and a short position in the 2-year forward contract. |
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