Fixing: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson m (Spacing 27/8/13) |
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2. The use of derivative instruments such as Fixed rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate. | The setting of an interest rate for a predetermined future period. | ||
For example, the periodic re-setting of the interest rate on a floating rate loan. | |||
2. | |||
The use of derivative instruments such as Fixed rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate. | |||
3. | |||
A fixing instrument (or fixing derivative) is one which hedges an exposure by effectively fixing a hedged rate for it. | |||
Contrasted with an insurance-type instrument, such as an option. | |||
== See also == | == See also == | ||
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* [[Forward rate agreement]] | * [[Forward rate agreement]] | ||
* [[Option]] | * [[Option]] | ||
Revision as of 13:59, 27 August 2013
1.
The setting of an interest rate for a predetermined future period.
For example, the periodic re-setting of the interest rate on a floating rate loan.
2.
The use of derivative instruments such as Fixed rate agreements (FRAs) for hedging purposes, to effectively fix a hedged rate.
3.
A fixing instrument (or fixing derivative) is one which hedges an exposure by effectively fixing a hedged rate for it.
Contrasted with an insurance-type instrument, such as an option.
