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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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