When a Financial Institution Hedges the Interest-Rate Risk for a Specific

question 34

Multiple Choice

When a financial institution hedges the interest-rate risk for a specific asset,the hedge is called a ________.

• A) macro hedge
• B) micro hedge
• C) cross hedge
• D) futures hedge

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Definitions:

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, a fundamental concept in evolutionary biology.

Fecundity

The potential reproductive capacity of an individual or population, often measured by the number of offspring produced.

Activation

The process of initiating action or the state of being active, often discussed in psychological and physiological contexts.

Parental Investment Model

A theory proposing that the extent and type of investment parents make in their offspring affects the offspring's survival and reproductive success.