In each of the following cases, indicate whether it would be appropriate for an FI to buy

Question:

In each of the following cases, indicate whether it would be appropriate for an FI to buy or sell a forward contract to hedge the appropriate risk.
a. A commercial bank plans to issue CDs in three months.
b. An insurance company plans to buy bonds in two months.
c. A savings bank is going to sell Treasury securities it holds in its investment next month.
d. A U.S. bank lends to a French company. The loan is payable in euros.
e. A finance company has assets with a duration of six years and liabilities with a duration of 13 years. Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...