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interest rate risk

This topic has 1 reply, 2 voices, and was last updated 1 year ago by LMR1006.

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November 11, 2023 at 9:30 am #694668
krrish2005
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Sir for interest futures and interest rate options
We can use them for both new loan as well as existing loan right?
Like if we have a existing loan variable rate and if we fear rise in interest rate then we can sell interest rate futures/buy put options ? Right??
And FRA can ONLY be for new loan
November 11, 2023 at 5:46 pm #694677
LMR1006
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Interest rate futures and interest rate options can be used for both new loans and existing loans.
You are correct, forward rate agreements (FRAs) are typically used for new loans, not existing ones.
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