Answers: A, B, D

This kind of perfect hedging is often not possible in reality. For example, sometimes we need to hedge a certain spot transaction, but there is no futures contract with that asset as the underlying asset in the market. At this time, we can only choose futures whose underlying asset is highly correlated with this asset as a hedging tool. This type of hedging is called cross hedging. We call the ratio of the futures contract position used for hedging to the hedged asset position the hedging ratio. The hedging ratio that can most effectively eliminate the risk of price changes in the hedged object is called the optimal hedging ratio. Most hedging with stock index futures is cross-hedging. Because investors can only achieve complete correspondence with stock index futures by buying and selling index funds or buying and selling a basket of stocks strictly according to the composition of the index.