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interest rate hedge:

similar to foreign exchange rate hedge. financial plan for deposite or borrow in future term.

the interest rate may change in favour or against.

commercial acuman: is there any risk for future financial settlement? how the move of interest rate will impact on the project. the loss and gain, if the risk need to be managed? by which way, professional judgement, which financial instrument should be used(derivatives) 

sensibility test for interest rate, NPV  how about the interest rate change may influence the investment decision making.

analysis and evaluation technology

 

FRA forward rate agreements

IRG  interest rate guarantee   option of FRA canbe lapes 

 

the futures's price is opposite to the interest rate, when the interest rate rise, the future's price drop. 

when plan to deposite, then buy future which the lower rate. 

when plan to borrow, then sell futures, which is the higher rate.

interest rate =(100-future)%

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