What Is Overhedging

question 23

Multiple Choice

What is overhedging?

• A)Selectively hedging a proportion of an FI's balance sheet position.
• B)Choosing to bear some interest rate risk as well as credit and FX risks.
• C)Reducing the risk to the lowest level possible.
• D)Using more hedge vehicles than is necessary to offset the risk in the cash asset.

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Definitions:

Equal Shares

The division of assets, resources, or obligations equally among all involved parties.

Ownership

The legal right or title to an asset or property, giving the owner control over its use, disposition, and the benefits that come from it.

Will

A legal document expressing an individual's wishes regarding the distribution of their assets after death.

Complete Ownership

Full legal rights and control over a property or asset, without any restrictions or encumbrances.