Recent advances in virtual-interface and computer technologies, including helmet-mounted displays (HMDs), three-dimensional auditory displays, haptic displays, head and eye position tracking devices, and computer-generated imaging techniques, have permitted the development of multi-sensory, interactive virtual environments. In spite of the dramatic ability of these environments to represent the perceptual world, they are limited by the problem of time delay---the delay between the input to a system and its corresponding output. For example, in the case of HMDs, time delays are present in the sampling of head position by a tracking device attached to the user's helmet and the appearance of the updated image in the HMD. Such delays cause the image to lag behind the user's head movement, thereby causing the image to be displayed in an incorrect position.
This dissertation is an empirical study of alternative strategies for hedging the interest rate risk of GNMAs. Four hedging strategies are considered: (1) the short sale of Treasury note futures, (2) the short sale of Treasury bond futures, (3) the simultaneous short sale of Treasury bond futures and Eurodollar certificate of deposit futures, and (4) the purchase of put options on Treasury bond futures. Each of these strategies is evaluated in simulations constructed with daily price series for seven different GNMA coupons covering the period from January 1985 to March 1987. Hedge ratios were computed using modified Macaulay duration and six different models of GNMA price sensitivity.