Your bank has a large portfolio of long term fixed rate mortgages and you believe that interest
Fantastic news! We've Found the answer you've been seeking!
Question:
Your bank has a large portfolio of long term fixed rate mortgages and you believe that interest rates will change by year end. You are worried that because of the interest rate change many of the mortgages will be prepaid by the homeowners. How could you use futures to reduce your bank's interest rate risk? Explain and be specific.
Posted Date: