While Hedging Through Interest Rate Futures Reduces or Eliminates the Risk

question 52

Multiple Choice

While hedging through interest rate futures reduces or eliminates the risk of loss,it also

• A)Is illegal in some cases
• B)Has not been accepted by most corporate financial managers
• C)Eliminates the possibility of an abnormal gain
• D)None of the above

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Definitions:

Substantial Quantity

A considerably large amount or volume of something.

Social Conscious

An awareness of the problems and injustices within society and the motivation to take action to address them.

Respondent Conditioning

A learning process in which a biologically potent stimulus becomes associated with a previously neutral stimulus.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.