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Discuss the risks arising from each of the following transactions individually and in aggregate to a bank. Discuss how to use derivatives products to hedge
- Discuss the risks arising from each of the following transactions individually and in aggregate to a bank.
- Discuss how to use derivatives products to hedge the risks you mentioned above and any other risk mitigation procedures that you may adopt.
- Discuss the regulatory requirements that you may have to comply while carrying out these transactions.
Transactions,
- Sold USDLKR 2 million to a corporate importer
- bought USDLKR 1 million from Bank A
- Bought 1 week forward USDLKR 0.5 million from Bank B
- Borrow LKR 1 billion from Bank C for a period of 1 week
- Buy a 5 year Sri Lankan Government bond with a face value of LKR 1 billion
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Business and Administrative Communication
Authors: Kitty o. locker, Donna s. kienzler
10th edition
77830105, 978-0077830106, 978-0073403182
