- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 36. Market Organization and Structure
- Subject 2. Assets and Contracts
CFA Practice Question
Hedgers in the futures market usually ______
B. only trade in the cash market.
C. trade in both the cash and futures markets.
A. only trade in the futures market.
B. only trade in the cash market.
C. trade in both the cash and futures markets.
Correct Answer: C
User Contributed Comments 2
| User | Comment |
|---|---|
| ibrahim18 | How? They are supposed to trade just in the futures market |
| mcbreatz | Key word in this question is hedgers. Hedgers have a risky position such as wheat prices that they want to offset with an opposite futures position to minimize the downside of a price swing. |