True and false1 hedging with options removes both upside, Ask an Expert

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True and False

1) Hedging with options removes both upside and downside performance potentials.

2) Options are used to insure an existing portfolio. For example, buying a put on an asset (or portfolio) reduces the risk of loss in case of a drop in value of the asset.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91529069

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