just going over the derivatives section and can’t get my head around this… how does mean variance hedge differ from just hedging the principal? I understand hedging transaction exposure, but how are we supposed to hedge economic exposure? The schweser guy said we should know it, but I don’t know if its worth the effort anyone care to explain?
dont think that’s worth wasting time on. It’s 1 question on off chance and in that case you’ve got 33% chance.
This is L1 forum…
“mean variance hedge differ from just hedging the principal” <<<<< Dump that section, dude, and focus on FSA and Ethics.