Answer: I and II

**Explanation:** Both statements are correct: **Statement I:** A strip hedge involves buying futures contracts for each delivery month, which requires active trading each month as contracts mature. This frequent trading increases transaction costs compared to a stack & roll hedge. **Statement II:** A strip hedge tends to have wider bid-ask spreads because it involves trading in multiple, less liquid distant-month contracts, whereas a stack & roll hedge typically uses more liquid nearby contracts.

Author: LeetQuiz Editorial Team