Why should a bank manage its interest rate risk?

Answer A bank needs to manage its interest rate risk in order to ensure that changes in interest rates do not create losses due to timing differences between the receipt of interest and the payment of int... Read More »

Top Q&A For: Why should a bank manage its interest rate risk

How to Minimize Interest Rate Risk?

Interest is the cost of any loan, from a mortgage to a car payment to student loans and even investment loans. Minimizing the risk of interest rates moving against you not only ensures that a loan... Read More »

What describes the interest rate risk of a bond?

A bond is essentially a loan made by investors to a company or government in exchange for a promise of repayment of the loan, with interest. All bonds that pay interest are subject to interest rate... Read More »

Interest Rate Risk & Factors That Impact a Company?

Interest rate changes can alter how much a company has to pay in interest or how much it is getting paid in interest. This in turn affects its profits, expenses or both. Therefore, interest rate ri... Read More »

Which bond has the greatest interest rate price risk?

On One Hand: Bonds with Longest Maturity Carry Greater RiskTraders use a concept called duration to calculate the price risk of a bond in response to changes in interest rates. The higher the durat... Read More »