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    Question

    What is a long

    hedge?
    A Buying assets to protect against price increases Correct Answer Incorrect Answer
    B Selling assets to protect against price declines Correct Answer Incorrect Answer
    C Holding assets indefinitely Correct Answer Incorrect Answer
    D Using currency options exclusively Correct Answer Incorrect Answer

    Solution

    A long hedge is a strategy where an investor takes a long position on a futures contract to protect against rising prices of an asset they plan to purchase in the future. This approach is commonly used by hedgers anticipating a future purchase or by speculators expecting an increase in the future's price.

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