Mortgage Valuation/Risk Analytics Originators, Servicers & Investors
www.compass-analytics.com
Do You Suffer From Anxiety? If So Join A Clinical Trial Nearby Today
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www.QuickenLoans.com
Discover® Bank offers great rates, security & convenience. Learn More!
www.discoverbank.com
A detailed interest rate analysis for bank and thrift institutions.
finpronj.com
More Than 1 Million Banking Rates Find Better Financial Rates Today!
www.BankingMyWay.com
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www.LendingTree.com
Wholesale rate, no points, and flat fee for borrowers with good credit.
www.CreditRewardsMortgage.com
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www.NexTag.com/Refinance
Historical study of factors affecting the performance of global and international bonds. By Bridgewater Associates.
www.bridgewaterassociates.com
Comprehensive research paper by Bridgewater Associates that addresses the firm's quantitative and qualitative approach to the construction of an optimal global bond portfolio.
www.bridgewaterassociates.com
Research note from Bridgewater Associates that addresses the diversification advantages of holding a global portfolio of bonds.
www.bridgewaterassociates.com
Lecture notes from the University of Illinois on hedging interest rate risk via duration and cash flow matching.
www.cba.uiuc.edu
Lecture notes from the University of Illinois, discussing various strategies for interest rate risk management.
www.cba.uiuc.edu
Overview of approaches to bond risk management.
www.cbe.wwu.edu
Guide to using 10 year note agency futures to hedge interest rate swap risk.
www.cbot.com
Guide to trading the spread between Treasury and Agency bonds using the CBOT's futures products.
www.cbot.com
Hedging strategies and hedge accounting under SFAS 133/IAS 39 for Eurodollar interest rate futures used to hedge profits on forecasted loan transactions.
www.cs.trinity.edu
Hedging strategies and accounting under SFAS 133/IAS 39 for Eurodollar interest rate options to cap borrowing rates on forecasted loan transactions. Presented in a case study by Bob Jensen of Trinity University.
www.cs.trinity.edu
Dresdner Bank's corporate group outlines the use of forward-rate agreements, swaps, caps and floors to hedge interest-rate risk.
www.dresdner-bank.com
Pricing and hedging applications of forward and futures contracts.
www.duke.edu
Feature articles that detail management of interest rate risk and related topics.
www.financewise.com
Building-block approach to pricing interest rate options using Libor volatilities and the forward curve.
www.financewise.com
A standard FRA contract form suggested by the BBA.
www.fxfxnet.com
A standard swap contract suggested by the BBA.
www.fxfxnet.com
Notes on using money market derivatives to hedge interest-rate exposure.
www.fxfxnet.com
A description of how cash managers can use FRAs to smooth cash flows; provided by Allied Irish Bank's Treasury group.
www.iol.ie
Calculation of bond and money market hedge ratios of instruments with the same and different durations.
www.liffe.com
Provider of news, analysis, discussions and links to relevant fixed-income derivatives and risk management information.
www.margrabe.com
Paper by Douglas Smith, Susan Sanchez and Edward Lawrence.
www.people.fas.harvard.edu
Provider of news and articles on identifying and managing market risk.
www.riskcenter.com
Definition of the concepts of underhedging and overhedging in cross-currency interest rate swaps.
www.trinity.edu
Managing the interest rate, currency and maturity risks associated with sovereign debt portfolios.
www.worldbank.org
Mortgage Valuation/Risk Analytics Originators, Servicers & Investors
www.compass-analytics.com
Do You Suffer From Anxiety? If So Join A Clinical Trial Nearby Today
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Guide to Interest Rate Risk and Hedging
Interest rate risks need analysis and management of risksInterest rate hedging is conditioned on previous interest rate risk analysis. Analysis is based on the risk of exposure to fluctuating interest rates. Strategies to mitigate hedge interest rate risks vary. They include interest rate swap and caps. Protect your investments by seeking interest rate risk analysis of your funds and protect them with investment management.
1. Interest rates are changing in today's markets, and banks and investors need to manage their portfolios in order to protect their investments.
2. Hedging is generally defined as making an investment to reduce the risk of adverse price movements in an asset. Bonds are more likely to be affected than stocks.
3. Interest rate risk analysis is necessary in order to create interest rate hedging strategies.
Action Steps
The best contacts and resources to help you get it done
Analyze your portfolio's interest rate risk
Assessing the vulnerabilities of your stock portfolio is the first step in securing your investments from the volatility of changing interest rates.
I recommend:
CERA is a credentialed actuarial risk management program that trains people in risk management. Its website provides connections to people who have graduated it from its program who can do an analysis of your company's situation. Critical Watch offers a Vulnerability Management package which discovers the assets and risks of your portfolio.
Investigate interest rate risk hedging for your needs
Interest rate risk hedging is important, but be sure that you are aware of the pros and cons of any investment strategy.
I recommend:
ING Investment Weekly does a good job in explaining the up and down sides of interest rate risk and hedging. It also lists and defines factors to consider and how they apply to the data of your portfolio. Interest rate swaps are explained by Green Interest Rate Swap Management. Measuring Risks is a must-read on interest rate risk analysis.
Find the solutions to your portfolio, bank or corporation's hedging interest rate risk
Hedging interest rates is a management tactic to be considered be considered after analysis by a financial specialist. Once an analysis is made, strategies should be put into play.
I recommend:
Wachovia Corporate and Institutional offers risk management programs and analysts who can provide you with hedging strategies. TD Commercial Banking offers products and services that cover a wide range of investment protection.
Tips & Tactics
Helpful advice for making the most of this Guide- Remember that strategies contain inherent risks, too. Any strategy comes with a fee, including interest rate hedging.
