You are a portfolio maanger. You are monitoring previous investments that you made in stocks and bonds of US firms and in stocks and bonds of Japanese firms. Though you plan to keep all these investments over the logn run, you are willing to hedge against adverse effects on your invetments. You expect that over the next year US and Japanese interest rates will decline, the US stock market will perform poorly, the japanese stock market will perform well and the Japanese Yen will depreciate against the dollar.

a) should you consider taking a position in US bond index futures to hedge your investment in US bonds?

b) should you consider taking a position in japanese index futures to hedge ?

c) shoudl you consider taking a position in US stock index futures to hedge your investment in US stocks?

d) should you consider taking a position in japanese stock index futures to hedge? (note: japanese stock index is demoninated in yen and therefore is used to hedge stock movements, not currency movements)

e) shoudl you consider taking a pos in japanese yen futures to hedge the exchange rate risk of your investment in japanese stocks and bonds?