Discuss in Relation to the Australian 10-Year Treasury Bond Contract

question 55

Essay

Discuss in relation to the Australian 10-year Treasury bond contract how it may be used to hedge a longer term interest rate exposure.

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Definitions:

Unusual Item

An event or transaction that is not expected to recur frequently or that is unusual in nature, affecting a company's financial statements.

Prior Period

Referring to a previous time frame in financial reporting or analysis.

Unusual Item

A term used in financial accounting to refer to gains or losses that are infrequent or unusual in nature, not part of the company's ordinary operations.

Accounting Method

A set of rules used to determine when and how income and expenses are reported in the financial statements.