Sometimes spreading has an advantage over hedging to lower risk because:
A)It can be difficult to find assets that move predictably in opposite directions
B)It is cheaper to spread than hedge
C)Spreading increases expected returns, hedging does not
D)Spreading does not affect expected returns

Question

Quizplus · Accepted Answer

Finding assets that move predictably in opposite directions can be difficult, making it impractical and ineffective to hedge. Spreading offers a more feasible way to diversify the portfolio and minimize risk.

Sometimes Spreading Has an Advantage Over Hedging to Lower Risk