After determining its Exposures, the company has to form an idea of where the market is headed.

The company will focus on forecasts for the next 6 months, as forecasts for periods beyond 6 months can be unreliable.

The focus of the Apex Management is to be aware of

• the Direction or the Big Trend in rates.
• the underlying assumptions behind the forecasts
• the Probability that can be assigned to the forecast coming true
• the possible extent of the move

The Risk Appraisal exercise and Benchmarking decisions will be based on such forecasts.