How to determine whether to buy or sell futures when hedging

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Reference no: EM13925978

5. Explain how to determine whether to buy or sell futures when hedging.

6. For each of the following situations, determine whether a long or short hedge is appropriate. Justify your answers.

a. A firm anticipates issuing stock in three months.

b. An investor plans to buy a bond in 30 days.

c. A firm plans to sell some foreign currency denominated assets and convert the proceeds to domestic currency.

Reference no: EM13925978

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