Month RSA (RM million) RSL (RM million) GAP (RM million) 1 44 52 -8 2 168 160 +8 3 4 160 120 220 120 -60 0 5 144 128 +16 6 240 170 +70 Total 876 850 +26
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Mr. Aiman, Treasurer of AJ Finance Berhad, has just completed a Maturity Bucket Analysis based on the a 6-month horizon.
a) If the market expectation is increase in interest rates, find the maturity bucket should Mr. Aiman, worries most about. Explain why the particular bucket matters.
b) Outline an appropriate hedge strategy for Mr. Aiman,.
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