When a Financial Institution Is Hedging Interest-Rate Risk on Its

question 6

Multiple Choice

When a financial institution is hedging interest-rate risk on its overall portfolio,the hedge is a ________.

• A) macro hedge
• B) micro hedge
• C) cross hedge
• D) futures hedge

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Definitions:

Physical

Pertaining to the body or the laws of nature, often used to refer to the material aspects of things as opposed to the mental or spiritual aspects.

Identified Resources

Resources whose location, quality, and quantity are known and can be recovered with current technology and economic conditions.

Nonrenewable Mineral

A mineral resource that cannot be replenished within a human timescale, such as fossil fuels or certain metals.

Underwater Mineral Deposits

Mineral resources found on the seafloor or under bodies of water, including metals, oil, and gas, often extracted through offshore mining.