Financial futures can be used by FIs to manage
A)credit risk.
B)interest rate risk.
C)liquidity risk.
D)foreign exchange risk.
E)credit risk, interest rate risk, and foreign exchange risk.

Question

Quizplus · Accepted Answer

Financial futures are contracts to buy or sell financial instruments at a future date for a price agreed upon today. They can be used to hedge against or speculate on changes in interest rates (interest rate risk), exchange rates (foreign exchange risk), and to some extent, credit risk, by locking in prices or rates. Therefore, they are tools for managing credit risk, interest rate risk, and foreign exchange risk.

Financial Futures Can Be Used by FIs to Manage