Analyze and discuss (potential) trading strategies used, including the carry trade, and option volatilities to mitigate exchange rate risk in a given portfolio for retail traders.

Which of the following is an exchange risk management technique through which the firmcontracts with a third party to pass exchange risk onto that party, via instruments such as forwardcontracts, futures, and options? a. Risk Transfer b. Risk Avoidance c. Risk Adaptation d. Diversification

Describe how commodity futures markets can beused to reduce input price risk.

What are considered the driving forces of the derivatives market? Rank them in order of importance and provide a reason for your answer: Driving Force Ranking Reason

Discuss the Efficient Market Hypothesis (EMH) and its implications for investors. How do the different forms of EMH (weak, semi-strong, and strong) impact trading strategies?

From the perspective of the treasury professional, which of the following is a type of market risk but is NOT a type of financial risk?   Commodity price risk Equity price risk Interest rate risk Foreign exchange (FX) risk

Briefly describe the role of derivative securities and discuss their potential impact on marketstability and systemic risk.

What are the criteria for selecting between hedging or diversification to manage risk in the foreign exchange market?

Market risks are: B. Interest rate risk, foreign exchange risk, portfolio concentration, commodity price risk D. Equity price risk, interest rate risk, foreign exchange risk, commodity price risk C. Foreign exchange risk, commodity price risk, issue risk, credit risk A. Equity price risk, transaction risk, foreign exchange risk, commodity price risk

Securities exchanges create efficient markets that do all of the following EXCEPT     control the supply and demand for securities through price. allocate funds to the most productive uses. allow the price to be determined by supply and demand of securities. ensure a market in which the price reflects the true value of the security.