In Passive Hedging, the Firm Frequently Reviews Total Exposure and Hedges

question 83

True/False

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

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Definitions:

Income Statement

A financial statement that provides a summary of a company's revenues, expenses, and profits/losses over a period of time.

Cash Flow to Stockholders

The amount of cash distributed to stockholders of a company, typically in the form of dividends or through the buyback of shares.

Net New Equity

The amount of money raised by a company through the issuance of new shares, minus any expenses related to the issuance.