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Question 10 Which of the following statements on hedging is false? a) Duration hedging is more accurate for small interest rate movements. b) Convexity hedging

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Question 10 Which of the following statements on hedging is false? a) Duration hedging is more accurate for small interest rate movements. b) Convexity hedging guards against large interest rate movements. c) Duration is not capable of capturing the nonlinear relationship between prices and interest rates. d) Iedging can be achieved with convexity only, independent of duration. e) None of the above

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