When a financial institution hedges the interest-rate risk for a specific asset,the hedge is called a ________.
A) macro hedge
B) micro hedge
C) cross hedge
D) futures hedge

Question

Quizplus · Accepted Answer

When a financial institution hedges interest-rate risk for a specific asset, it is called a micro hedge. This is because the hedge is specific to a particular asset or investment, rather than a broad strategy for the institution as a whole. The other options do not accurately describe this type of hedge.

When a Financial Institution Hedges the Interest-Rate Risk for a Specific