A Naïve Hedge Is One

question 8

Multiple Choice

A naïve hedge is one

• A)in which the hedger is not fully informed.
• B)in which the hedger attempts to eliminate all of the risk of the underlying spot position.
• C)in which the hedger uses microhedges rather than macrohedges to limit risk.
• D)in which the hedger unwittingly increases the risk of the FI's position.
• E)that does not have to be reported on the FI's financial statements.

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Definitions:

Activity

Any action or series of actions performed by users, systems, or machines, possibly tracked or logged for analysis.

24 Hours

A duration period that consists of a full day, typically used to describe the total hours in a day.

Multiple Calendars

Various calendar systems or schedules that can be used simultaneously for organizing events.

Overlapping Items

Objects or elements that extend over and cover a part of another, often leading to visual clutter or data interpretation issues in various contexts.