Which of the following statements is true?
A) If a cash asset is hedged on a dollar for dollar basis with a forward or futures contract, we refer to this hedge as a dollar hedge.
B) If a cash asset is hedged on a dollar for dollar basis with a forward or futures contract, we refer to this hedge as a plain hedge.
C) If a cash asset is hedged on a dollar for dollar basis with a forward or futures contract, we refer to this hedge as a naive hedge.
D) All of the listed options are correct.

Question

Quizplus · Accepted Answer

A naive hedge refers to a simple, straightforward hedging strategy where the cash asset is hedged on a dollar-for-dollar basis using a forward or futures contract.

Which of the Following Statements Is True