Detailing the differences between using futures contracts

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Chief executive officer (CEO) Marjorie Kesich has requested that you create a PowerPoint presentation detailing the differences between using futures contracts and options contracts to reduce risk. She wants to know if there are any advantages to using one of the instruments over the other. Discuss the following:

  • Is one of these more effective than the other?
  • Are the costs of each different?
  • Calculate how many call options contracts would be needed if you were trying to hedge a portfolio of 200 shares of stock.

Reference no: EM131466499

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