{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

BK5 - Topics in Commercial Bank Management Lecture FIVE...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
MANA130107 Bank Management 1 Lecture FIVE Assets-Liability Management (chap 8 ) Topics in Commercial Bank Management MANA130107 Bank Management 2 Assets-Liability Management Topics covered in this lecture Derivatives in Assets-Liability Management - Futures - Options - Swaps - Caps, floors and collars MANA130107 Bank Management 3 Steps in Hedging Identify the spot market risk exposure to reduce Given the spot market risk, determine whether a long or short futures position is needed Select the best futures contract Determine the appropriate number of futures contracts to trade. Buy or sell the appropriate futures contracts Determine when to get out of the hedge position, either by reversing the trades (letting contracts expire), or making or taking delivery Verify that futures trading meets regulatory requirements and the banks internal risk policies
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon