Chapter 32 - Using Futures and Hedging

 32.a. Define Short Hedge

32.a.1 Define Long Hedge

32.b: Describe the arguments for and against hedging and the potential impact of hedging on firm profitability

32.c: Define the basis and explain the various sources of basis risk and explain how basis risks arise when hedging with futures

30.d Optimal Hedge Ratio

32.f Hedging with stock index futures

32.g: Explain how to use stock index futures contracts to change a stock portfolio's beta

32.h: Explain how to create a long-term hedge using a "stack and roll" strategy and describe some of the risks that arise from this strategy.

32. Key Concepts