Interest rate guarantee: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson m (Spacing 22/8/13) |
imported>Doug Williamson m (Category added 9/10/13) |
||
| Line 13: | Line 13: | ||
* [[Interest rate option]] | * [[Interest rate option]] | ||
* [[Option]] | * [[Option]] | ||
[[Category:Manage_risks]] | |||
Latest revision as of 13:53, 9 October 2013
(IRG).
This is an option on a specified short-term interest rate for a specified notional loan or deposit.
A borrower normally wants a guarantee that their hedged rate payable will be 'no higher than' a specified worst case rate.
A lender or investor normally wants a guarantee that their hedged rate receivable will be 'no less than' a specified worst case rate.
