A Microhedge Is a

question 46

Multiple Choice

A microhedge is a

• A)hedge of a particular asset or liability.
• B)hedge against a change in a particular macro variable.
• C)hedge of an entire balance sheet.
• D)hedge using options.
• E)hedge without basis risk.

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Definitions:

Price Effect

The price effect is an economic term describing the impact of a change in a product’s price on its demand and supply.

Total Revenue

The total receipts a company receives from sales of goods or services before any expenses are subtracted.

Identical Products

Goods that are exactly the same in terms of quality, size, and features, making them indistinguishable from one another in the eyes of consumers.

Close Substitutes

Products or services that can serve as almost identical alternatives to one another, typically influencing consumer choice and market dynamics.