Is it correct to say that currency derivatives & interest rate derivatives which are similar both work in the same way such as:
(Currency Futures & Interest rate Futures - since they both are FUTURES so they do work in the same way for currency or interest rate hedging)
or
(Currency Options & Interest rate Options - since they both are OPTIONS so they do work in the same way for currency or interest rate hedging)?
Ask the Tutor ACCA FM
Derivatives
5y ago#1The overall effect is the same in both cases.
However interest rate options are actually options on interest rate futures which makes calculations different. (Although, as I explain in my free lectures, calculations on interest rate futures and options are not examinable until Paper AFM.)
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