The Number of Futures Contracts That an FI Should Buy

Multiple Choice

The number of futures contracts that an FI should buy or sell in a macrohedge depends on the

A) size of its interest rate risk exposure.
B) direction of its interest rate risk exposure.
C) return risk trade-off from fully hedging that risk.
D) return risk trade-off from selectively hedging that risk.
E) All of the options.