A bank intends to borrow Rs200 million by issuing fixed deposits with 90 -day maturities and the relevant intere rate is 9 percent. If it is forecasted that interest rates would rise by 50 basis points, calculate the interest rate risk on these deposits? Q. 5: (Marks: 5+3) To mitigate the risk in question 4, the risk manager of the bank decides to trade 20090 -day Eurodollar time deposit futures contract trading at an IMM index of 95 . If the forecast on interest rates comes true and the bank offsets its position by opposite trading of 200 same contracts at an IMM index of 94.50 . a) What is the gain/ loss to the bank from the combined cash and future market trading? b) Differentiate between "Basis" and "Basis Risk" with an appropriate simple example