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Which of the following is CORRECT? A. A gold miner expects to mine and sell 100 ounces of gold in 2 months. To hedge against
Which of the following is CORRECT?
A. | A gold miner expects to mine and sell 100 ounces of gold in 2 months. To hedge against adverse gold price risk, he/she should long gold forward contracts. | |
B. | A short position in the forward makes money if the underlying asset price rises above the forward price. | |
C. | There is no credit risk with forward or futures contracts. | |
D. | Forward contracts are usually settled at maturity, whereas futures contracts can be settled before or at maturity. |
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