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Information on sources of interest rate risk and employing hedging strategies to control this risk.

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Interest Rate Risk and Hedging

Hedge interest rate risk is susceptible to changes in interest rates. Managing interest rate risk is key to keeping your investments working for you.

Making the Most of Interest Rate Risk and Hedging

Interest rate hedging allows investors to reduce the risk involved in lending or investing in certain companies or stocks. The concept involves determining the difference between assets and liabilities and using hedging strategies to reduce the gap between the two.

Interest Rate Risk and Hedging Key Terms

Interest rate risk is the potential for the value of an investment to change due to changes in interest rates. An example of such an investment is a bond.

Managing Interest Rate Risk - Investopedia

Interest rate risk exists in an interest-bearing asset, such as a loan or a bond, due to .... These products all provide ways to hedge interest rate risk, with different ...

Hedging Interest Rate Risks - Credit Suisse

Hedging Interest Rate Risks. Find out more about the most important products for hedging interest rate risk. Hedging Interest Rate Risks; Cap (Buy); Collar ...

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Strategies for hedging interest rate risk in a cash balance plan

balance (hybrid) plans has increased.1 What kinds of interest rate hedging ... While these strategies may help sponsors hedge interest rate risk, closely tracking.

Hedging Interest Rate Risk with Financial Futures ... - St. Louis Fed

Hedging Interest Rate Risk with. Financial Futures: Some Basic. Principles. Michael T. Belongia and G. J. Santoni. 011 much of the postwar period, stable rates ...

Lecture 2 – Bond pricing. Hedging the interest rate risk

Hedging the interest rate risk. IMQF, Spring Semester 2011/2012. Module: Derivatives and Fixed Income Securities. Course: Fixed Income Securities. Lecturer: ...

Using Inverse ETFs to Hedge Interest Rate Risk - Yahoo Finance

Jun 12, 2013 ... From Yahoo Finance: With interest rates rising, more aggressive traders are using short or inverse exchange traded funds to capitalize on ...

New ETFs are hedged against credit and interest rate risk

Feb 7, 2014 ... iShares, Wisdomtree launch new funds taking advantage of the government's new floating-rate notes.

Hedging Interest Rate Risk—Case Study and Strategies - QFINANCE

A number of instruments exist to hedge against the risks posed by changing interest rates. For a company that decides to reduce its exposure to rising interest  ...

Hedging Interest-Rate Risk with Duration

Outline. • Pricing and Hedging. – Pricing certain cash-flows. – Interest rate risk. – Hedging principles. • Duration-Based Hedging Techniques. – Definition of ...

Interest Rate Risk and Hedging Basics


Interest rate risk and hedging basics can help you understand how banking and lending institutions calculate the risk involved in lending to a person or company. The guidelines also helps investment firms calculate the risk involved in investing in a specific portfolio. Unstable market conditions and variable interests rates both play a role in interest rate risk.

Some companies hedge interest rate risk to manage the risk involved in cash flow. Hedging interest rates allows a person or company to:

1. Decide when and whether to fix an interest rate.

2. Establish the terms of the interest rate, including whether or not to use a fixed interest rate.

3. Assign part of a debt to a fixed interest rate.

4. Use interest rate risk hedging to lock in an interest rate in advance.

Use online sources to learn more about interest rate hedging

Online sources provide you access to in-depth information on interest rate hedging and how to implement the philosophies behind the concept. When it comes to hedging interest rate risk, investment experts disagree on whether it is a helpful or harmful practice.

Grasp interest rate hedging strategies at classes taught by experts

Industries that deal with finance constantly change and evolve, which is why it can be beneficial to take a class. In some cases, it is easier and quicker to take a short course rather than delve through information on your own.

Work with companies or a interest rate risk manager to improve your business dealings

If you don't want to take the time to learn the information you need to know about interest rate risk and hedging basics, it might be beneficial to hire a professional to handle things related to the concept. In some cases, you may prefer to hire a company rather than a manager, but it all depends on your situation.