A Microhedge Is a

question 16

Multiple Choice

A microhedge is a

• A) Hedge against a change in a particular macro variable
• B) Hedge of a particular asset or liability
• C) Hedge of an entire balance sheet
• D) Hedge using options
• E) Hedge without basis risk

---

Definitions:

Cookies

Small, sweet baked treats, often containing flour, sugar, and some type of oil or fat, sometimes including other ingredients such as chocolate chips or nuts.

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost of production by the quantity of output.

Marginal Cost

The additional cost incurred to produce one more unit of a good or service.

Variable Cost Curve

A graphical representation that shows how total variable costs change with variations in output volume, helping firms visualize cost dynamics related to production levels.