A naive hedge occurs when

Question $3$ options:

$1)$

an FI manager wishes to use futures or other derivative securities to hedge the entire balance sheet duration gap.

$2)$

a cash asset is hedged on a direct dollar$-$for$-$dollar basis with a forward or futures contract.

$3)$

an FI reduces its interest rate or other risk exposure to the lowest possible level by selling sufficient futures to offset the interest rate risk exposure of its whole balance sheet.

$4)$

an FI purchases an insurance cover to the extent of $80\%$ of losses arising from adverse movement in asset prices.

$5)$

All of the options.