Question 1

Financial futures are used by FIs to manage:

Accepted Answer

A) credit risk. 
B) interest rate risk. 
C) liquidity risk. 
D) sovereign country risk. 
A) credit risk. 
B) interest rate risk. 
C) liquidity risk. 
D) sovereign country risk.

Question 2

Which of the following statements is true?

Accepted Answer

A) Micro- and macro-hedging always lead to the same hedging strategies and results. 
B) Micro- and macro-hedging can lead to the same hedging strategies but will lead to different results. 
C) Micro- and macro-hedging will lead to different hedging strategies but will also lead to the same results. 
D) Micro- and macro-hedging can lead to different hedging strategies and results. 
A) Micro- and macro-hedging always lead to the same hedging strategies and results. 
B) Micro- and macro-hedging can lead to the same hedging strategies but will lead to different results. 
C) Micro- and macro-hedging will lead to different hedging strategies but will also lead to the same results. 
D) Micro- and macro-hedging can lead to different hedging strategies and results.

Question 3

Which of the following statements is true?

Accepted Answer

A) Over-hedging will lead to a significant reduction in risk, but also in returns. 
B) In terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position. 
C) It is not possible to over-hedge a position. 
D) Over-hedging will lead to a significant reduction in risk, but also in returns, in terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position and it is not possible to over-hedge a position. 
A) Over-hedging will lead to a significant reduction in risk, but also in returns. 
B) In terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position. 
C) It is not possible to over-hedge a position. 
D) Over-hedging will lead to a significant reduction in risk, but also in returns, in terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position and it is not possible to over-hedge a position.

Financial futures are used by FIs to manage:

Which of the following statements is true?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 7: Managing Interest Rate Risk Using Off Balance Sheet Instruments

Financial futures are used by FIs to manage:

Which of the following statements is true?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters