The 10-Year Bond Futures Contract Can Be Useful in Hedging

question 16

Short Answer

The 10-year bond futures contract can be useful in hedging against an exposure to changes in ____________ fixed-interest rates.

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Definitions:

Unconditional Promise

A commitment or guarantee without any stipulations or requirements that the promisor must fulfill.

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract.

Contractual Intent

The intention of parties to enter into a legally binding agreement, demonstrated by their words, actions, and circumstances surrounding the agreement.

Letter Of Credit

A binding document that a buyer can request from a bank to guarantee that the payment for goods will be made to the seller.