Stephens, John J.

Managing Interest Rate Risk : Using Financial Derivatives

The effects of interest rate changes on a business can be drastic. Should interest rates change over time, a company can find itself with a burden of debt it is unable to service, or an income that is far less than expected. This can have a very damaging effect on a company s financial performance if it is not anticipated. In this book, John Stephens demonstrates how to manage this risk with the use of financial derivatives. An in depth knowledge of mathematics, interest rates, or derivatives is not required in order to understand or practice the techniques in this book. The author explains in full the nature and uses of all techniques to manage interest rate risk. This book examines, in a balanced and objective fashion, the extent to which financial derivatives can be used to reduce the exposure of a business to risk. Beginning with a general overview of the definitions, processes and procedures, the book then separately explains in detail each of the individual approaches. Topics dealt with include: Interest spot and FRA markets Interest rate futures contracts Interest rate swaps Interest rate options