Financial futures are available to protect against all of the following except:
A)Interest-rate risk.
B)Level of equity prices.
C)Currency swap risk.
D)Exchange-rate risk.

Question

Quizplus · Accepted Answer

Financial futures are available to protect against interest-rate risk, level of equity prices, and exchange-rate risk. However, financial futures are not used to protect against currency swap risk, which is a risk associated with the exchange of one currency for another at an agreed-upon rate. Instead, currency swap risk is typically managed through foreign exchange hedging strategies such as forward contracts or options.

Financial Futures Are Available to Protect Against All of the Following