Cash Flow Matching Can Be Effective Hedging Technique When

question 37

Multiple Choice

Cash flow matching can be effective hedging technique when

• A) the exposure cash flow is relatively constant and predictable over time.
• B) it is part of the risk-sharing agreement.
• C) there are no local suppliers that can accept longer term payments in their home currency.
• D) all of the above

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Definitions:

Margin Of Error

An indicator of the precision of an estimate or poll, expressing the range within which the true value lies with a specified level of probability.

Confidence

The degree of certainty or trust in a specific context, often used to refer to the level of certainty in statistical conclusions.

Confidence Interval

A band of numerical estimates, from sample data, seen as likely to include the value of an invisible population characteristic.

Sampling Distribution

The probability distribution of a given statistic based on many random samples from a specific population.