A stocks beta is a key input to hedging in the equity market. A bonds duration is

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A stock’s beta is a key input to hedging in the equity market. A bond’s duration is key in fixed-income hedging. How are they used similarly? Are there any differences in the calculations necessary to formulate a hedge position in each market?

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jan 04, 2013 08:04 AM

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A stocks beta is a key input to hedging in the equity market. A bonds duration is

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In formulating a hedge position a stocks beta and a bonds duration are used similarly to determine the expected percentage gain or loss in the value o...View the full answer

Investments

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