Hedge Ratio, Pension Immunizing Portfolios, and the Best Performing Portfolio

Hedge Fund
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Hedge Fund
Please use your own words to explain what hedge ratio is.
The hedge ratio is the number of units of the hedging instrument required to hedge one unit of the underlying asset. For example, if a company owns 1,000 shares that cost $48 per share and the stock’s current market price is $50, the hedge ratio is 4.8. The company can hedge the shares by borrowing $48,000 to buy the stock. If the stock price increases or decreases, the company’s investment in the stock will always be $48,000.
What major risks are pension immunizing portfolios trying to hedge against?
Pension immunizing portfolios are trying to hedge against the risk that the pension fund will not have enough money to pay benefits as promised. The portfolios are also trying to hedge against the risk that the pension fund's investments will not perform as well as expected. In particular, a pension fund may want to hedge against the risk that different cohorts of its members will have different pension needs. The pension funds may also want to ensure that its long-term pension liabilit...