When the futures expires before the hedge is terminated and the hedger moves into the next futures expiration,it is called
A)spreading the hedge
B)rolling the hedge forward
C)optimally weighting the hedge
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Rolling the hedge forward refers to the practice of moving from one futures contract to another as the previous one expires. This allows the hedger to maintain their position and minimize the risk of price fluctuations without having to terminate the hedge completely. This is a common strategy in commodity markets where futures contracts have specific expiration dates.

When the Futures Expires Before the Hedge Is Terminated and the Hedger