Which of the Following About Hedging Is Incorrect

question 46

Multiple Choice

Which of the following about hedging is incorrect?

• A) With the Australian future market an investor will have to use a 90-day bank-accepted-bill to hedge commercial paper.
• B) In the Australian futures market a borrower will have to use 3-year Treasury bond futures to hedge a loan facility with a term to maturity of 3 to 5 years.
• C) A borrower will have to use a 10-year Treasury bond future to hedge an issue of long-term debentures.
• D) When prices of 3-year Treasury bond futures varies over time with the prices of long-term debentures this is called spread-commodity hedging.

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Definitions:

Directed Verdict

A ruling by a judge, typically during a jury trial, that instructs the jury to deliver a specific verdict because the facts of the case legally support only that outcome.

Peremptory Challenges

In legal proceedings, these are rights allowing attorneys to reject a certain number of potential jurors without stating a reason.

Summons

A legal document issued by a court or administrative agency requiring the person named on it to appear in court at a specified time and place.

Interrogatory

A written question which one party sends to another in a lawsuit, requiring a written answer as part of pre-trial discovery.