Fixing: Difference between revisions
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Revision as of 14:19, 23 October 2012
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.
See also