A Firm Owns an Asset a and It Wants to Hedge

question 61

Multiple Choice

A firm owns an asset A and it wants to hedge against changes in the value of A by making an offsetting sale of asset B. The firm minimizes risk if:

• A) Selling the same number of units of B as assets of A
• B) Selling hedge ratio (delta) number of units of B
• C) Selling the reciprocal of hedge ratio number of units of B
• D) None of the above

Comprehend the basic concepts of energy within biological systems, including the laws of thermodynamics.

Recognize the role of ATP as the energy currency in cells and its various uses.

Identify the structure and function of enzymes in metabolic reactions.

Understand the concepts of metabolism, including anabolic and catabolic pathways.

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Definitions:

American Colonization Society

An organization established in the early 19th century aimed at resettling free African-Americans to Africa; Liberia was a significant colony established by this society.

Liberia

A West African country founded in the 19th century by freed slaves from the United States.

African Americans

A racial or ethnic group in the United States with ancestry traced to Africa, particularly those whose ancestors were forced into slavery.

Spanish Settlement

Refers to the colonies and territories established by Spain across the Americas, Asia, and the Pacific from the late 15th to early 19th centuries, part of the broader Spanish colonization.