Interest Rate Swaps: A Hedging Tool
Interest rate swaps are financial instruments used by businesses and investors to manage or hedge their exposure to fluctuations in interest rates. In this article, we will delve into the intricacies of interest rate swaps, exploring their mechanism, benefits, risks, and practical applications in the financial world. Understanding Hedging Hedging is a fundamental financial strategy employed by businesses and investors to mitigate risks associated with adverse price movements. In essence, hedging involves taking strategic positions