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A Futures Instrument,such as a T-Bill,can Be Used to Hedge

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A futures instrument,such as a T-bill,can be used to hedge a cash or a spot instrument such as the prime rate,where the two instruments are not perfectly correlated.What type of hedge is this referred to as?


Definitions:

Income Tax Liability

The total amount of income tax that an individual or corporation owes to the government, based on their taxable income.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the tax burden on the next dollar of income.

Income Tax Liability

The total amount of income tax that an individual or business owes to the government based on their taxable income.

Income

The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as a profit from financial investments.

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