1. In the effort of developing a better benchmark floating interest rate for the money market, Which of the following factors should a financial market regulator consider? (Select all that apply)

A: It should have only an overnight tenor to exclude any uncertainties from time horizon

B: It should have a credit component to reflect counterparty risk, especially when credit conditions in the wholesale funding market worsen.

C: It can be an unsecured rate derived from transactions in the uncollateralized borrowing market.

D: It should be based on modeled estimates to ensure its objectivity.

2. Which of the following is (are) considered as justifiable management practices?

A: A British company expecting USD payments takes a short position on USD forward contracts to offset potential loss when GBP appreciates against USD.

B: A U.S. investor excludes carry trades from his investment portfolio and invests only in U.S. stocks and U.S. treasury bills.

C: A Forex trader ends her trading day with a flat trading book.

D: A U.S.-headquartered MNC relies on the expected profit from an uncovered interest arbitrage to settle a GBP-denominated bill.