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 naïve hedge.
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

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

Which of the Following Statements Is True