10. A financial institution issued $1 milion of 1-year maturity floating Treasury bill rate plus 2%. What commercial paper is repriced every three months at the 91-day Treasny is the financial institution's hedge that risk exposure? A. The financial insti on's interest rate risk exposure and how can it use financial futures to rate tution can hedge its exposure to interest rate increases by selling financial selling financial A. The financial institution futures. B. Th insttution cin hedge its exposure to interest rate decreases by selling inancial futures. ancial institution can hedge its exposure to interest rate increases by buying financial nancial institution can hedge its exposure to interest rate increases by holding a naked orbu futures. hedge. E. The financial institution cannot hedge its exposure to interest rate increases or decreases using financial futures. 11. An agreement between a buyer and a seller at time 0 to exchange a standardized, prespecified asset for cash at a specified later date is characteristic of a A. spot contract. B. forward contract C. futures contract D. put options contract. E. call options contract