Which process steps are part of exposure management ? Note: There are 2 correct answers to this question.

Which process steps are part of exposure management ? Note: There are 2 correct answers to this question.
A . Link the hedging instrument to the exposure
B . Perform an effectiveness test
C . Create the raw exposures
D . Release the raw exposures that could be hedged

View Answer

Answer: C D

Explanation:

Exposure management is a process that allows you to identify and manage the financial risks arising from your business activities. The process steps are part of exposure management are: create the raw exposures, release the raw exposures that could be hedged, link the hedging instrument to the exposure, and perform an effectiveness test. The raw exposures are created from the financial transactions or positions that are exposed to market risks. The released exposures are the ones that are eligible for hedging and can be linked to a hedging instrument.

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