question archive In the wake of COVID-19, the companies in the airways industry have experienced a considerable decline in their profitability, a commercial bank is concerned about the financial ability of borrowing companies in airways industry to serve the debt (repay loans)
In the wake of COVID-19, the companies in the airways industry have experienced a considerable decline in their profitability, a commercial bank is concerned about the financial ability of borrowing companies in airways industry to serve the debt (repay loans)
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In the wake of COVID-19, the companies in the airways industry have experienced a considerable decline in their profitability, a commercial bank is concerned about the financial ability of borrowing companies in airways industry to serve the debt (repay loans). As a financial consultant, what type of derivatives you would recommend the bank to buy in order to hedge against this risk? Explain why.
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In the covid-19 situation the airwsys profitability highly effected which also effect bank due to air companies borrowing.So in this case bank Should buy Treasury derivatives which include U.S treasury bill ,notes or bond to hedge against such risk.
