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How could she best hedge the ibm stock

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Reference no: EM13505681

Mary has IBM stock and will sell it two months from now at a specified date in the middle of the month. Mary would like to hedge the price of risk of IBM stock. How could she best hedge the IBM stock without incurring basis risk?

A. Short a two-month forward contract on IBM stock
B. Short a three-month futures contract on IBM stock
C. Short a two-month forward contract on the S&P 500 index
D. Answers a. and b. are correct.

 

Reference no: EM13505681

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