Interest rate risk management (1) Part 3 - ACCA (AFM) lectures

[@niharikaaredla5799]

Thank youuuuu so much!! This lecture has been very helpful. :)

[@blackm9063]

Great

[@Harry-hk1pg]

Any one know when we calculating the basis 0.5, why we use 6% LIBOR rather than 7%

[@manojreddy_42]

Hi Harry, because Futures rate is based on LIBOR i.e. 6 % but it is not based on to Company's specific boroowing rate. As the borrowing rate my be higher for another company. It can not be taken as base for deciding Future's price. so we will use LIBOR. 🙂🙂

[@Harry-hk1pg]

@@manojreddy_42 It make sense now, thanks a mill.