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Commerce · Q964

Banking and Financial Institutions

Graduate and Post Graduate · Commerce · question 964

Q964

An investor owns one thousand shares of Reliance. Around budget time, he gets uncomfortable with the price movements. One contract on Reliance is equivalent to 100 shares. Which of the following will give him the hedge he desires?

A.
Buy 5 Reliance futures contracts
B.
Sell 10 Reliance futures contracts
Answer
C.
Sell 5 Reliance futures contracts
D.
Buy 10 Reliance futures contracts

Answer: Option B

Solution

Answer: Option B
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