A Macro Hedge Is a

question 71

Multiple Choice

A macro hedge is a

• A) Hedge of a particular asset or liability
• B) Hedge on macroeconomic variables
• C) Hedge using options on particular liabilities
• D) Hedge without basis risk
• E) Hedge of an entire balance sheet

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Definitions:

Semantics

The branch of linguistics and logic concerned with meaning, including the ways in which words and sentences relate to each other and to the objects they refer to.

Morphemes

The smallest meaningful units in the grammar of a language.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used.

Mental Set

A cognitive bias that involves approaching a problem in a particular way, often one that has been successful in the past, which may block or delay the identification of alternative solutions.