Comparing option hedging to futures hedging

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Reference no: EM13828612

When comparing option hedging (hedging with options) to futures hedging (hedging with futures), which statement is most true:

a) Option hedging allows for smaller variability in the end value than futures hedging.

b) Futures hedging protect against downside risk but allows for upside potential.

c) Futures hedging are more expensive than option hedging because the latter is settled in cash.

d) Option hedging protects against downside risk but is typically more expensive than futures hedging.

Reference no: EM13828612

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