The Uniform Guidelines for Banks That Trade in Futures and Forwards

question 96

Multiple Choice

The uniform guidelines for banks that trade in futures and forwards require a bank to:

• A)establish internal guidelines regarding its hedging activity.
• B)establish trading limits.
• C)disclose large contract positions that materially affect bank risk to shareholders and outside investors.
• D)None of the above statements.
• E)All of the above statements.

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Definitions:

Federal Deposit Insurance Corporation

A U.S. government agency that protects depositors in the event of a bank failure by insuring deposits up to a certain limit.

Money Supply

The total amount of money available in an economy at a specific time.

Tax Increases

Government-imposed hikes in taxes intended to raise additional revenue for public spending or to influence economic behavior.

Trade Restrictions

Measures implemented by governments to control the amount and type of goods and services that can be traded across borders, such as tariffs, quotas, and embargoes.