The Measure of Hedging Effectiveness in a Minimum Variance Hedge

question 30

True/False

The measure of hedging effectiveness in a minimum variance hedge is the size of profit on the hedge.

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Definitions:

Reasonable Intent

A legal standard assessing what a person of ordinary intelligence and prudence would intend under certain circumstances.

Blue Book Value

An estimated value of a vehicle, derived from a standard guide or reference, used largely in the used car market for valuation purposes.

Offeree

The person to whom an offer is made, who has the power to accept the offer, thus forming a binding contract.

Reasonable Means

Methods or actions that are considered fair, rational, and appropriate under given circumstances.