Future Options Are Particularly Useful for Offsetting Risk Created When

question 31

Multiple Choice

Future options are particularly useful for offsetting risk created when a bank ________.

• A) extends option-like commitments to bank customers
• B) has the right to borrow at a fixed-rate in the future
• C) has a loan portfolio of primarily fixed-rate loan products
• D) is involved in gold and other inflation-hedging instruments

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Definitions:

Global Supply Chain

A supply chain that extends across international borders, encapsulating a network of suppliers, manufacturers, and distributors involved in producing and delivering products worldwide.

Flexibility

The ability of a system or organization to quickly adapt to changes in demand, technology, environments, or internal processes without significant costs or delays.

Uncertainties

Refers to the unpredictability or lack of certainty in events, situations, or outcomes, often affecting decision-making processes especially in supply chain and finance.

Strategic Planning

The process of defining a business's strategy or direction and making decisions on allocating resources to pursue this strategy.