6. A bank that goes short in the futures market: (LO4) a. has the right to accept delivery of the underlying security at the contract price if they wish. b. has the right to make delivery of the underlying security at the contract price if they wish. c. is obligated to accept delivery of the underlying security at the contract price. d. is obligated to make delivery of the underlying security at the contract price. e. is exposed to limited losses and unlimited gains. 7. A bank's promise to pay the holder a designated amount of money, on a designated future date, and often used in international trade is known as a(n): (LO3) a. promissory guarantee. b. discount security. c. bankers' acceptance. d. in-the-money option. e. accretion note. 8. Banks are generally not allowed to invest in speculative grade bonds. What kind of risk is this designed to limit? (LO4) a. Liquidity Risk b. Business Risk c. Credit Risk d. Operational Risk e. Interest Rate Risk 9. A financial institution that is concerned about the possibility that the purchasing power of both the interest income and repaid principal on a loan will decline is concerned about which of the following? (LO4) a. Business Risk b. Liquidity Risk c. Tax Exposure d. Credit Risk e. Inflation Risk 10. A bank that is concerned that the economic conditions of the market area they serve may take a downturn with fall demand for loans and higher bankruptcies in the areas, is concerned about which of the following? (LO4) a. Business Risk b. Liquidity Risk c. Tax Exposure d. Credit Risk e. Inflation Risk