Two Basic Strategies for Reducing the Effects of Interest Rate

question 81

Multiple Choice

Two basic strategies for reducing the effects of interest rate risk include using hedging strategies and:

• A) buying financial futures contracts.
• B) selling options on futures.
• C) forecasting interest rates.
• D) financing long term.

Identify factors affecting mutual fund performance, including beta adjustments during market advances or declines.

Calculate geometric and arithmetic average returns.

Understand the concept of serial correlation in mutual funds and hedge funds.

Interpret mutual fund performance data, including risk and return metrics.

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Definitions:

High Consensus

A situation where there is widespread agreement among members of a group or organization, often indicating uniformity of opinion or perspective.

External Attribution

The process of attributing the cause of an observed behavior or outcome to factors outside the individual, such as the situation or other people.

Self-Fulfilling Prophecies

Expectations about a situation or individual that elicit behaviors which make the prediction come true, reinforcing the original expectation.

Low Sense of Achievement

The feeling of not having accomplished significant goals, tasks, or objectives, often leading to dissatisfaction or lack of motivation.