Interest rate futures are a tool used by business finance managers to lower the risk of losing money when interest rates change. This assertion is accurate.
By purchasing bonds with varying durations, as well as by hedging fixed-income investments using interest rate swaps, options, or other interest rate derivatives, interest rate risk can be mitigated.
Interest rate futures are used to hedge bond portfolios or interest rates as well as for speculative purposes. Interest rate futures can be used by hedgers to lessen the impact of a negative movement in bond prices and rates as well as by speculators to wager on the direction of rate movements.
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