Question: Explain the principles involved in duration-based hedging. How does the computation of the hedge ratio here differ from that of the minimum-variance hedge computation?

Explain the principles involved in duration-based hedging. How does the computation of the hedge ratio here differ from that of the minimum-variance hedge computation?

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Durationbased hedging is based on the idea that the position being hedged a bond or a portfolio of a ... View full answer

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