Which of the Following Best Describes a Situation in Which

question 37

Multiple Choice

Which of the following best describes a situation in which a firm holds both an asset and a liability of the same size that are exposed to the same price fluctuations?

• A)Natural hedge
• B)Physical hedge
• C)Portfolio hedge
• D)Divergent hedge

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Definitions:

Emphysema

A chronic lung disease in which scar tissue and mucus obstruct the respiratory passages.

Bronchitis

Any inflammation of the bronchi.

Central Nervous

Refers to the central nervous system, which is comprised of the brain and spinal cord, controlling most functions of the body and mind.

Peripheral Nervous

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, responsible for connecting the central nervous system (CNS) to limbs and organs.