Which of the following statements is true?
A)Micro- and macrohedging always lead to the same hedging strategies and results.
B)Micro- and macrohedging can lead to the same hedging strategies but will lead to different results.
C)Micro- and macrohedging will lead to different hedging strategies but will also lead to the same results.
D)Micro- and macrohedging can lead to different hedging strategies and results.

Question

Quizplus · Accepted Answer

Micro- and macrohedging involve different levels of analysis and decision-making. Microhedging involves hedging specific risks of a firm or a portfolio, while macrohedging involves hedging overall market risks or risks that affect an entire industry or sector. Therefore, it is possible for micro- and macrohedging to lead to different hedging strategies and results.

Which of the Following Statements Is True