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The Effectiveness of a Cross-Hedge Depends on the Degree of Correlation

question 26

True/False

The effectiveness of a cross-hedge depends on the degree of correlation between the market values of the two financial instruments.


Definitions:

Expression

A combination of symbols and operators in mathematics that represents a specific value.

Simplify

The act of minimizing complexity in a mathematical expression by executing permitted operations.

Expression

A combination of numbers, symbols, and operations used to represent a value, without an equivalence relation.

Simplify

The process of rendering an algebraic expression into its simplest form, making it easier to understand or solve.

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