In the middle of next year, ABC Ltd will need to borrow $20m from the market. They are going to issue bills, but are worried that the rates may increase by next year. Explain to ABC Ltd how you can use futures to lock in the rate for next year. 

Answer rating: 100% (QA)

ABC Ltd can hedge against potential interest rate hikes next year by using interest rate futures contracts Heres how The Problem ABC Ltd is concerned ... View the full answer