A _____ Position in T-Bond Futures Should Be Used to Hedge

question 29

Multiple Choice

A _____ position in T-bond futures should be used to hedge falling interest rates and a _____ position in T-bond futures should be used to hedge falling bond prices.

• A)long; short
• B)long; long
• C)short; long
• D)short; short

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Definitions:

Jurisdiction

The official power to make legal decisions and judgements, often in a specific geographical area.

Foreign Exchange Gain

A profit arising from the increase in value of one currency against another with which it is being compared between two points in time.

Exchange Rates

The exchange rate determining how one national currency can be converted into another, influencing international business and investment decisions.

Year-End

The conclusion of a fiscal or calendar year, marking the final day for accounting adjustments, after which financial statements are generated.