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  Tom informs you that he is now contemplating hedging his 10,000 shares of Home Depot...

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Finance

 

Tom informs you that he is now contemplating hedging his 10,000 shares of Home Depot inc using futures contracts. Precisely explain and specifically detail the steps involved in hedging this share portfolio using futures contracts.

 

Answer & Explanation Solved by verified expert
4.2 Ratings (651 Votes)
Future Contract It is simply defines as exchange traded forward contract Forward Contract It is a contract where one party agree to buy another party agree to sell specified asset on some future date    See Answer
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Transcribed Image Text

 Tom informs you that he is now contemplating hedging his 10,000 shares of Home Depot inc using futures contracts. Precisely explain and specifically detail the steps involved in hedging this share portfolio using futures contracts. 

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