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Which of the following is correct? Forward contracts are traded in exchange-traded derivatives markets Forward contracts are subject to monthly settlement Forward Price ( F

Which of the following is correct?

  1. Forward contracts are traded in exchange-traded derivatives markets
  2. Forward contracts are subject to monthly settlement
  3. Forward Price (F0) is contracted now and will be used for a transaction in the future
  4. Forward contracts have no default risk

Which of following should be used by investors to hedge against a decrease in the S&P index?

  1. Long Futures on the S&P index
  2. Long Call Options on the S&P index
  3. Short Futures on the S&P index
  4. Long Forward on the S&P index

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