What Is a Microhedge

question 2

Multiple Choice

What is a microhedge?

• A) It is a hedge of the bank's aggregate portfolio.
• B) It is a hedge using just one type of futures contract.
• C) It is the hedge of a specific asset or liability for which the bank is exposed to interest rate risk.
• D) It is a hedge using two or more types of futures contracts.
• E) It is a has that has a duration of less than one month.

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Definitions:

UI

Universal Instantiation, a logical rule of inference stating if something is true for everything in a category, it is true for any specific instance of that category.

Quantifier-Negation Rule

A principle in formal logic that deals with the relationship between quantifiers and the negation of statements.

Quantifier

A symbol or word in logic that specifies the quantity of specimens in the domain of discourse that satisfy an open formula.

Negation

The contradiction or denial of something, or the operation of inverting the truth value in logic.