1. Alice is a Financial Risk Manager in a large offshore bank in Kuala Lumpur. She intends to buy additional stocks valued at RM15 million, however, she expects to receive the fund 3 months from today. What is the risk?

Select one:

A. Three months later the price of the stocks might move SIDE-WAY

B. Three months later the price of the stocks might DECREASE to RM10 million

C. Three months later the price of the stocks might INCREASE to RM20 million

D. Three months later the price of the stocks might move SIDE-WAY to RM15 million

2. Alice is a Financial Risk Manager in a large offshore bank in Kuala Lumpur. She intends to buy additional stocks valued at RM50 million, however, she expects to receive the fund 3 months from today. What must she do to manage the possible risk of losses?

Select one:

a. buy futures contract

b. Sell futures contract

c. do nothing