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Hi
I want to be clear that the techniques used hedge for interest rate risk and currency exchange risk ..aren’t they the same ..
The way we use forward rate .futures and options
We are using same methodology ..am I correct in saying this ?
There is a new article on p4 on interest rate risk mgt ..does it mean it is highly examinable
One more point I wud ask can I expect 50 mark question on risk mgt solely asking all components
Yes – the basic idea is the same for both.
Interest rate risk and foreign exchange risk are both always highly examinable – most of the exams have a question on one (but only usually one) of the two.
No – it is very unlikely indeed to have 50 marks solely on this. Usually it gets asked as one of the 25 mark questions. If it were to be in question 1, then it would only be a smaller part of the question.
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