An FI Has Reduced Its Interest Rate Risk Exposure to the Lowest

question 14

Multiple Choice

An FI has reduced its interest rate risk exposure to the lowest possible level by selling sufficient futures to offset the risk exposure of its whole balance sheet or cash positions in each asset and liability.The FI is involved in

• A)microhedging.
• B)selective hedging.
• C)routine hedging.
• D)overhedging.

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Definitions:

Cultural Relativism

The principle that an individual's beliefs and activities should be understood based on that person's own culture.

Ethical Perspective

An individual's or society's viewpoint on morals and the principles of right and wrong that guide behavior and decision-making.

Ethical Imperialism

An attempt to impose one’s ethical standards on other cultures.

Attempt to Impose

An effort to enforce or apply rules, decisions, or views upon others, often without their consent.