Finance · Risk Management & Derivatives

Derivatives can be effectively utilized to explore new frontiers in institutional risk management and improve per-transaction profitability, in addition to building and sustaining market depth and systemic resilience. Which of the following are the primary needs for a bank to have a robust understanding and application of Derivatives? 1. Need to hedge interest rate risk in the banking book2. Need to provide customized currency hedging solutions to corporate clients3. Need to increase the bank's speculative profits without regulatory oversight4. Need for efficient capital allocation under Basel III norms5. Need to manage the credit risk of the investment portfolio6. Application of sophisticated valuation models for MTM accounting