Selective Hedging Occurs by Reducing the Interest Rate Risk by Selling

question 123

True/False

Selective hedging occurs by reducing the interest rate risk by selling sufficient futures contracts to offset the interest rate risk exposure of a portion of the cash positions on the balance sheet.

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Definitions:

Heavy Power Loads

Electrical loads that consume a significant amount of power, typically found in industrial settings.

Overload Relay

A special-purpose relay designed so that its contacts transfer whenever its current exceeds a predetermined value. Overload relays are used with electric motors to prevent motor burnout due to mechanical overload.

Proximity Switch

A device that detects the presence or absence of an object or material without physical contact, often used in industrial applications for automation.