Free 2016-FRR Exam Braindumps
Financial Risk and Regulation (FRR) Series Questions 46–50 (page: 31)

Arnold Wu owns a floating rate bond. He is concerned that the rates may fall in the future decreasing his payment amount.
Which of the following instruments should he buy to hedge against the fall in interest rates?

In early March, an energy trader takes a long position in natural gas futures for delivery in June, and hedges this exposure by taking a position in futures for July delivery. These trades were executed on the expectation that over time, the relative prices of the June and July contracts will come into alignment, the movement in these two contracts will largely mirror each other, and as a result of this, the net exposure is minimized and the position is protected against absolute price movements. However, if the two relative prices do not come into alignment with each other due to the scarcity of any of the two traded contracts in the futures market, the trader is likely to become exposed to the

James Johnson bought a coupon bond yielding 4.7% for $1,000. Assuming that the price drops to $976 when yield increases to 4.71%, what is the PVBP of the bond.

What is a difference between currency swaps and interest rate swaps?

Unico Bank, concerned with managing the risk of its trading strategies, wants to implement the trading strategy that exposes the bank to the lowest market risk.
Which one of the following four strategies should Unico take to limit its risk exposure?