The Number of Futures Contracts That an FI Should Buy

question 67

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 above.

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Definitions:

Tertiary Sector

A segment of the economy focused on providing services rather than producing goods, including sectors like retail, entertainment, and financial services.

Self-employed

A status referring to individuals who work for themselves, either by owning a business or by offering their services independently.

Secondary Labour Market

Jobs that are insecure and temporary, offer minimal pay, and provide few opportunities to advance.

Primary Labour Market

Jobs that provide stable and comfortable salaries, potential for growth and promotion, and fringe benefits, but also require postsecondary training or education.