Alternative approaches to forwards and futures for hedging

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Problem: You have to buy some asset in the future. You can use a forward contract or a future contact to hedge the price risk.

Required:

Question 1: Suggest some alternative approaches to forwards and futures for hedging.

Question 2: What are the advantages and disadvantages of each of the other approaches?

Question 3: Before you make a final recommendation on the hedging strategy, what other informationcould you request from upper management?

Reference no: EM132418175

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