It is March and a trader intends to buy 90-day bank bills in June. What is one way the trader can mitigate their interest rate risk?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 3BIC
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It is March and a trader intends to buy 90-day bank bills in June.
What is one way the trader can mitigate their interest rate risk?
Select one:
O Sell 90-day bank bill futures with a March contract expiry date
O Sell 90-day bank bill futures with a June contract expiry date
Buy 90-day bank bill futures with a June contract expiry date
Buy 90-day bank bill futures with a March contract expiry date
Transcribed Image Text:It is March and a trader intends to buy 90-day bank bills in June. What is one way the trader can mitigate their interest rate risk? Select one: O Sell 90-day bank bill futures with a March contract expiry date O Sell 90-day bank bill futures with a June contract expiry date Buy 90-day bank bill futures with a June contract expiry date Buy 90-day bank bill futures with a March contract expiry date
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