Futures to hedge interest-rate risk


Problem 1: Explain how portfolio managers can use maturity gap and duration gap to measure their exposure to interest-rate risk.

Problem 2: Explain how portfolio managers can use financial options and futures to hedge interest-rate risk.

Problem 3: Describe how portfolio managers use financial swaps to control their risk exposure. Explain how both parties in an agreement can benefit from a swap.

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Finance Basics: Futures to hedge interest-rate risk
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