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interest rate risk

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › interest rate risk

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by IAW3005.
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  • November 11, 2023 at 9:30 am #694668
    krrish2005
    Participant
    • Topics: 138
    • Replies: 229
    • ☆☆☆

    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
    IAW3005
    Moderator
    • Topics: 4
    • Replies: 1589
    • ☆☆☆☆☆

    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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