If We Were to Design a Macrohedge, Which of the Following

question 24

Multiple Choice

If we were to design a macrohedge, which of the following positions would help reduce the bank's interest rate risk?
I. Long position in bond futures contracts
II. Buying put options on bonds
III. Purchasing an interest rate cap

• A) I only
• B) II only
• C) III only
• D) I and III only
• E) II and III only Risk is from falling interest rates or rising prices with a positive repricing gap.

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