In What Is Known as Dynamic Hedging, Banks Always Hedge

question 47

True/False

In what is known as dynamic hedging, banks always hedge open positions in any foreign currencies.

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Definitions:

Liability Policy

An insurance policy that provides coverage for legal claims against the insured, typically covering bodily injury and property damage to third parties.

Legally Obligated

Binding under law or contract, requiring a party to act or refrain from acting in a specified manner.

Coinsurance Costs

Expenses that are not fully covered by insurance and must be shared between the insurer and the insured, typically as a percentage.

Increase Of Hazard

A scenario in insurance where the risk of loss becomes greater than what was contemplated at the time the policy was issued.