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Hedge (finance): Quiz


Question 1: ________
List of banks
Federal Reserve SystemBank for International SettlementsCentral bankOpen market operations

Question 2: Interest rate risk – is the risk that the relative value of an interest-bearing asset, such as a loan or a bond, will worsen due to an ________ increase.
Money supplyCentral bankInterest rateDebt

Question 3: For the following categories of the risk, for exporters, that the value of their accounting ________ will fall against the value of the importers, also known as volatility risk.
ISO 4217CoinCurrencyCyprus

Question 4: ________ use futures contracts and derivatives to hedge their exposure to the price of jet fuel.
Continental AirlinesAmerican AirlinesNorthwest AirlinesAirline

Question 5: If the trader simply bought the shares based on his belief that the Company A shares were underpriced, the trade would be a ________.
Stock marketEfficient-market hypothesisSpeculationShort (finance)

Question 6: Equity – the risk, or sometimes reward, for those whose ________ are equity holdings, that the value of the equity falls
Cash flow statementAssetBalance sheetValuation (finance)

Question 7: Since the trader is interested in the company, rather than the industry, he wants to hedge out the industry risk by short selling an equal value (number of shares × price) of the shares of Company A's direct ________, Company B.
CompetitionCompetition (economics)EconomicsHuman

Question 8: The market values of wheat and other crops fluctuate constantly as ________ for them vary, with occasional large moves in either direction.
Keynesian economicsSupply and demandMicroeconomicsNeoclassical economics

Question 9: There are many specific financial vehicles to accomplish this, including insurance policies, ________, swaps, options, many types of over-the-counter and derivative products, and perhaps most popularly, futures contracts.
Swap (finance)Forward contractDerivatives marketOption (finance)

Question 10: In ________, a hedge is a position established in one market in an attempt to offset exposure to price fluctuations in some opposite position in another market with the goal of minimizing one's exposure to unwanted risk.
Bond (finance)FinanceFinancial marketDebt


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