Multiple Choice
Which of the following statements is true?
A) The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called value risk.
B) The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called basis risk.
C) The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called gap risk.
D) The mismatches between changes in the price of the exposure and the value of the instrument used to hedge the position is called fundamental risk.
Correct Answer:
Verified
Correct Answer:
Verified
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