2016-FRR Exam Dumps | To hedge a foreign exchange exposure on behalf of a client, a small regional bank seeks to enter into

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GARP.2016-FRR.v2024-09-09.q145
Question 137

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Question 137/145

To hedge a foreign exchange exposure on behalf of a client, a small regional bank seeks to enter into an offsetting foreign exchange transaction. It cannot access the large and liquid interbank market open primarily to larger banks. At which one of the following exchanges can the smaller bank trade the currency futures contracts?
I. The Tokyo Futures Exchange
II. The Euronext-Liffe Exchange
III. The Chicago Mercantile Exchange

A. I

B. III

C. II, III

D. I, II, III

Correct Answer: D

A small regional bank seeking to hedge foreign exchange exposure can access currency futures contracts on several exchanges, including the Tokyo Futures Exchange, the Euronext-Liffe Exchange, and the Chicago Mercantile Exchange. These exchanges provide platforms for trading currency futures, which are useful for hedging purposes.
References:Information about the accessibility of currency futures contracts on these exchanges is available in financial market resources and the "How Finance Works" document.

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