The Number of Futures Contracts That an FI Should Buy

question 64

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.

---

Definitions:

Jury Trial

A legal proceeding where a jury made up of citizens determines the outcome of a case.

Double Jeopardy

The legal principle that prohibits an individual from being tried twice for the same crime in the same jurisdiction.

Provincial Court

A lower level court in Canada that handles less serious criminal offenses, family law (excluding divorce), and small claims.

Civilly Sued

The process of bringing a lawsuit in civil court to seek remedy for a wrongdoing that does not necessarily constitute a criminal offense.