Managing interest rate risk (hedging) - introduction
Taught by Ben Wilson · AI tutor support included
You'll learn what interest rate risk is, why it matters to borrowers and savers, and how hedging tools protect against it.
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In this lesson
- 0:00 Welcome to interest rate hedging
- 0:30 What is interest rate risk
- 1:23 How borrowers and savers are affected
- 2:03 Managing risk with fixed rates and hedging
- 3:15 Five hedging techniques explained
- 4:35 Key learning outcomes for this topic
- 5:43 Study hints and practice strategies
About this lesson
This introduction covers the five main hedging products you'll study—forward rate agreements, interest rate futures, exchange-traded options, over-the-counter options, and swaps—along with the key skills you'll need: understanding product features, performing complex calculations, and evaluating which tool suits different business circumstances. You'll also pick up practical study hints to tackle this technical section of the syllabus with confidence, including how it connects to currency hedging and why practice transforms these calculations from daunting to manageable.
Duration: 7m
Transcript
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