QUESTION ONE Oou work in the risk management department of a major bank that has significant treasury perations. The bank is wishing to borrow funds in three months' time. The chief finance fficer (CFO) is unsure about the interest rate outlook up to that period. Interest rates are urrently at 4.75%, but recent economic figures have pointed to a speeding of the rate of rowth in the economy. You have to prepare a report for the CFO on the funding exercise. equired: A. In your report describe three different ways in which the funding risk can be managed. [10 marks] B. If the CFO was also looking at selling Eurodollar interest rate futures to hedge th position, describe in detail how the hedge should be set up. [10 marks] [TOTAL: 20 MARKS]