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Which of the following situations describe a hedger with the exposure to basics risk. i. A portfolio manager for a large-cap growth fund knows he
Which of the following situations describe a hedger with the exposure to basics risk.
i. A portfolio manager for a large-cap growth fund knows he will be receiving a significant cash investment From a client within the next month and wants to pre-invest the cash using stock index futures.
ii. A farmer has a large corn he is looking to sell before June 30. The farmer uses a June futures contract to lock in his sales price.
a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2
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