Banks use to hedge against risk through options and futures contracts in order to:* A. Reduce risk B. Manage risk C. Avoid risk D. Transfer risk
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- Discuss the following operating hedge strategies 1. Risk Shifting 2. Price Adjustment clauses 3. Exposure nettingwhich one is correct please confirm? QUESTION 23 The ____ theory holds that the securities markets are demarcated by maturity. a. expectations b. liquidity premium c. boondoggle d. market segmentationWhich of the following is NOT an external method of interest rate risk management? * A. Using an interest rate swap B. Using financial futures C. Using an off-balance-sheet strategy, such as a forward rate agreement D. Having fixed-interest assets financed by fixed-interest liabilities and equity
- Country risk, is also referred to as _____? a. Currency risk b. Political risk c. Market risk d. Liquidity risk. **************************** correct answer please.Which of the following is most likely to expose the holders to counterparty credit risk? A. open-end mutual funds B. closed-end mutual funds C. ETNs D. ETFsWhich one is the least risky option? A. Bonds B. Shares C. Treasury Bills D. Trading
- 1. A bond call price amount is a. lower than the par value b. higher than the par value c. lower than the discount value 2. Risk of losing a market due to forex change. a. economic risk b. market risk c. transaction risk6. Which of the following types of investment carries the greatest risk? Stocks Bonds Mutual funds Certificates of depositDefine each of the following terms: a. Derivatives b. Enterprise risk management c. Financial futures; forward contract d. Hedging; natural hedge; long hedge; short hedge; perfect hedge; symmetric hedge; asymmetric hedge e. Swap; structured note f. Commodity futures
- 1. What are some examples of financial instruments that can be used for hedging interest rate risks, and how would they work?The purpose of the hedger in futures trading is () A. Transfer price risk B. Transfer ownership of goods C. Obtain risky profits D. Obtain physical goodsAmong the factors considered in the quantitative models of default risk: a. Business cycle b. Reputation c. Collateral d. Leverage