Identify what risk the manager of an fi faces

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Question: In each of the following cases, identify what risk the manager of an FI faces and whether the risk should be hedged by buying a put or a call option.

a. A commercial bank plans to issue CDs in three months.

b. An insurance company plans to buy bonds in two months.

c. A thrift plans to sell Treasury securities next month. A U.S.

d. bank lends to a French company with the loan payable in euros.

e. A mutual fund plans to sell its holding of stock in a British company.

f. A finance company has assets with a duration of six years and liabilities with a duration of 13 years.

Reference no: EM131633744

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