Short-term investment using options market

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Reference no: EM131554071

Know how a firm can hedge its interest rate risk on a short-term fixed or variable rate bank loan or on a fixed or variable rate short-term investment using the options market. In particular understand how an interest rate collar works and how it should be structured: (a) if a firm holds a variable rate loan and expects interest rates to rise as well as (b) if a firm holds a variable rate investment and expects rates to fall.

Reference no: EM131554071

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