A hedge in which the asset underlying the futures is not the asset being hedged is
A)a cross hedge
B)an optimal hedge
C)a basis hedge
D)a minimum variance hedge
E)none of the above

Question

Quizplus · Accepted Answer

A cross hedge is a type of hedge where the underlying asset in the futures contract is different from the asset being hedged. This can be useful when an exact match for the underlying asset may not be available, but a similar asset can be used for hedging purposes.

A Hedge in Which the Asset Underlying the Futures Is