Discuss country risks, funding risks and market risks, Risk Management

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QUESTION 1

Discuss the following terms with supported examples

(a) Country risks

(b) Funding risks

(c) Market risks

QUESTION 2

Total return swaps are used by financial firms to manage credit risks. Discuss.

QUESTION 3

Transaction, Translation and Economic Exposure are not important for a domestic firm. Discuss (use instance to support your answer).

QUESTION 4

Currency futures can be used to manage a firm's currency exposures. Discuss (Use instances to support your answer).

QUESTION 5

Firms borrowing or lending money from and to financial institutions can use different interest rate derivatives to manage their interest rate exposures. Discuss in relation to the derivatives which a firm can use to hedge interest rate risk. Use instances to support your answer.


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