22-101 How Can the Portfolio Manager Use Futures Markets to Protect

question 19

Multiple Choice

22-101 How can the portfolio manager use futures markets to protect against the risk exposure of rising interest rates?

• A)Buy interest rate futures.
• B)Sell currency futures.
• C)Buy currency futures.
• D)Sell interest rate futures.
• E)Sell stock market index futures.

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Definitions:

Separation Of Duties

A risk management strategy that divides responsibilities within an organization to reduce the risk of fraud or error.

Internal Control System

Procedures and methods to control a firm’s assets as well as monitor its operations.

Accounting Department

A division within a company or organization that is responsible for managing financial records, transactions, and reporting.

Periodic System

An inventory system that updates inventory and cost of goods sold at the end of each accounting period.