Question
there are some derivative instruments to enable hedging against adverse interest rate fluctuations. Long put option (cap) Strip of long put options Long BAB futures
there are some derivative instruments to enable hedging against adverse interest rate fluctuations.
Long put option (cap)
Strip of long put options
Long BAB futures
Short BAB futures
Long TYB futures
Short TYB futures
3 x 6 FRA
6 x 12 FRA
Interest rate swap
No hedge transaction
in the scenario below, which derivative instruments should be adopted. why?
The company also has significant funds on term deposit maturing next month. Your objective is to re-invest the funds for a further three years, at a deposit rate that is locked in now.
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
14th edition
1337090581, 978-1337090582
