A builder has taken floating rate loan of Rs.50 lakh on 1st April 2010. The rate of interest. A builder has taken floating rate loan of Rs.50 lakh on 1st April 2010. The rate of interest at the inception of loan is 9%. PA. Interest is to be paid every year on 31st March and the duration of loan is 3 years. In the month of October 2010, the RBI releases following projections about interest rates: 31st March 2011- 9.75%, 31st March 2012- 11%, 31st March 2013- 11.50%, Show how the borrower can hedge the risk arising out of expected interest rate rise when he wants to peg his interest rate to 9.5%st at the inception of loan is 9%. PA. Interest is to be paid every year on 31st March and the duration of loan is 3 years. In the month of October 2010, the RBI releases following projections about interest rates: 31st March 2011- 9.75%, 31st March 2012- 11%, 31st March 2013- 11.50%, Show how the borrower can hedge the risk arising out of expected interest rate rise when he wants to peg his interest rate to 9.5%