In Trend Projection, the Trend Component Is the Intercept of the Regression

question 137

True/False

In trend projection, the trend component is the intercept of the regression equation.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in fair value of an asset or liability or an identified portion of an asset or liability that is attributable to a particular risk.

Cash Flow Hedge

A form of hedge that aims to manage exposure to fluctuations in cash flows related to a particular risk, such as interest rates or foreign exchange rates.

Cash Flow Hedge

A type of hedge that protects against the exposure to variability in cash flows due to a particular risk such as interest rate changes.

Forward Rate

The predetermined price for a transaction that will occur at a specific future date, commonly used in foreign exchange and interest rate markets.