What Is a Macrohedge

question 47

Multiple Choice

What is a macrohedge?

• 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:

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased first are sold first.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal.