Protect against the risk exposure of rising interest rates

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Reference no: EM131952946

1. Conyers Bank holds U.S. Treasury bonds with a book value of $30 million. However, the U.S. Treasury bonds currently are worth $28,387,500.

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

Buy interest rate futures.

Sell currency futures.

Buy currency futures.

Sell interest rate futures.

Sell stock market index futures.

2. The $/£ rates changed from $1.4537/£ last year to $1.2568/£ this year. During the one-year period, the $ value relative to £:

-strengthened by 15.67%

-weakened by 15.67%

-strengthened by 13.55%

-weakened by 13.55%

Reference no: EM131952946

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