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Exam 2016-FRR Topic 1 Question 44 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 44
Topic #: 1
Using a forward transaction, Omega Bank buys 100 metric tones of aluminum for delivery in six-months' time.
However, after two months, the bank becomes concerned with the potential fluctuations in aluminum prices
and wants to hedge its potential exposure against a possible decline in aluminum prices. Which one of the
following four strategies could the bank use to offset the risk from its current exposure to aluminum as it sets
the price for selling the commodity in four-months' time?

Suggested Answer: B Vote an answer

by Jamie at Aug 05, 2024, 10:50 AM

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