Based on the Price Sensitivity Hedge Ratio,if the Modified Duration

question 43

True/False

Based on the price sensitivity hedge ratio,if the modified duration of the futures contract increases (assumed to be positive),then the optimal number of futures contracts increases.Assume the durations are positive.

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Definitions:

Wage Rates

The fixed amount of compensation paid to an employee per unit of time, often per hour or day.

Compensation Estimates

The calculated projections or assessments of remuneration, including wages, salaries, and bonuses, that employees can expect to receive for their work.

Broadbanding

A strategy in compensation that reduces the complexity of salary grades by combining them into fewer, wider bands to provide more flexibility in job assignments and pay.

Salary Grades

A structured pay scale that categorizes positions based on responsibility levels, skill requirements, and job complexity to determine salary ranges.