A Hedge with a Futures Contract Reduces Volatility in Payoff

question 102

True/False

A hedge with a futures contract reduces volatility in payoff gains on both the upside and downside of interest rate movements.

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Definitions:

Psychomotor Disorder

A condition that involves a disruption or impairment in the coordination between mental processes and physical movement.

Communication Disorder

Disorders characterized by significant difficulties in the ability to receive, send, process, and comprehend verbal, nonverbal, and graphic information.

Synapses

Junctions between nerve cells where neurotransmitters are released to transmit signals from one neuron to another.

Cognitive Abilities

Mental capabilities that include the capacity to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly, and learn from experience.