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Unit 7 Risk Assessment and Interest Rate Risk
Bonds  ,[object Object],[object Object]
Bonds  ,[object Object],[object Object],[object Object],[object Object]
Bonds  ,[object Object],[object Object]
Bonds  ,[object Object],[object Object]
Bonds  ,[object Object],[object Object],[object Object],[object Object]
Bonds  ,[object Object],[object Object],[object Object]
Bonds  ,[object Object],[object Object],[object Object]
Bonds  ,[object Object],[object Object],[object Object]
Bond Price ,[object Object],[object Object]
Bond Price ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Price ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Forwards and Futures ,[object Object],[object Object],[object Object]
Futures ,[object Object]
Futures ,[object Object],[object Object],[object Object],[object Object]
Futures ,[object Object],[object Object],[object Object],[object Object],[object Object]
Futures ,[object Object],[object Object],[object Object]
Futures ,[object Object],[object Object],[object Object],Hedge achieved by combining a physical transaction alongside a derivative instrument
Futures ,[object Object],[object Object],[object Object]
Futures ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Hedge achieved by combining a physical transaction alongside a derivative instrument
Interest Rate Futures strategy ,[object Object],[object Object]
Futures strategy ,[object Object],[object Object],[object Object]
Futures strategy ,[object Object],[object Object],[object Object],[object Object]
Interest Rate Swaps ,[object Object],[object Object]
Interest Rate Swaps ,[object Object],[object Object],[object Object],[object Object]
Interest Rate Swaps ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Interest Rate Swaps ,[object Object],[object Object],[object Object],A B Pays bank 6% Pays bank L+1.1% Pays B Libor Pays A  5.06%
Interest Rate Swaps ,[object Object],[object Object],[object Object],A B Pays bank 6% Pays bank L+1.1% Pays B Libor Pays A  5.06% The 2 companies have entered a swap agreement in addition to their individual bank agreements
Interest Rate Swaps ,[object Object],A B Pays bank 6% Pays bank L+1.1% Pays new bank  Libor Pays new bank  5.08% Swap bank Pays A  5.03% Pays B  Libor Notice the bank makes a profit
Interest Rate Swaps ,[object Object],[object Object],[object Object],[object Object],A B Pays bank 6% Pays bank L+1.1% Pays new bank  Libor Pays new bank  5.08% Swap bank Pays A  5.03% Pays B  Libor Notice the bank makes a profit
Next Time ,[object Object]

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Unit 7 - Bonds and interest rate risk

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