What Advantages and Disadvantages Does Hedging an Interest Rate Exposure

question 74

Essay

What advantages and disadvantages does hedging an interest rate exposure with options have compared to hedging with futures?

---

Definitions:

Grossly Negligent

Showing a severe lack of care or deliberation that results in blatant disregard for the safety or rights of others, often leading to extreme harm or risk.

Jeweller

A person or entity engaged in the business of selling and sometimes manufacturing jewelry.

Commercial Aircraft

Airplanes designated for carrying passengers or cargo as part of a business for profit, excluding military or private aircraft.

Flight Attendant

An airline employee responsible for ensuring the safety, comfort, and needs of passengers during a flight.