Financial futures are used by FIs to manage:
A)credit risk
B)interest rate risk
C)liquidity risk
D)sovereign country risk

Question

Quizplus · Accepted Answer

Financial futures are used to manage interest rate risk. They allow FIs to hedge against unfavorable fluctuations in interest rates by locking in a predetermined rate for a certain date in the future. This can help mitigate losses from unanticipated interest rate changes. Financial futures are not typically used for managing credit risk, liquidity risk, or sovereign country risk.

Financial Futures Are Used by FIs to Manage