ACI Dealing Certificate (#78)

A bank wants to use STIR futures for establishing a macro hedge for the asset portfolio. Which of the following statements is correct?

It is reasonable for the bank to purchase futures contracts if they expect interest rates to rise.
It is reasonable for the bank to take a long position in anticipation of rising rates.
Losses (or gains) in the value of the cash position can be largely offset by gains (or losses) in the value of the futures position
It is reasonable for the bank to sell futures contracts if it expects interest rates to fall