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## Research Discussion #8 **This is an individual Research Discussion (RD).** Please upload a Short PowerPoint Video presentation of your Group Research Discussion (Group) along with the actually written group RD. You can use Zoom, Jing, Youtube, etc to record your PPT presentation. Please upload i…
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## Research Discussion #8
**This is an individual Research Discussion (RD).**
Please upload a Short PowerPoint Video presentation of your Group Research Discussion (Group) along with the actually written group RD. You can use Zoom, Jing, Youtube, etc to record your PPT presentation. Please upload it as a folder with written group RD and the presentation link.
An interest rate derivative is a financial instrument with a value that is linked to the movements of an interest rate or rates. These may include futures, options, or swaps contracts. Interest rate derivatives are often used as hedges by institutional investors, banks, companies, and individuals to protect themselves against changes in market interest rates, but they can also be used to increase or refine the holder's risk profile or to speculate on rate moves.
Interest rate derivatives are most often used to hedge against interest rate risk, or else to speculate on the direction of future interest rate moves. Interest rate risk exists in an interest-bearing asset, such as a loan or a bond, due to the possibility of a change in the asset's value resulting from the [v](https://www.investopedia.com/insights/forces-behind-interest-rates/) ariability of interest rate risk. Interest rate risk management has become very important, and assorted instruments have been developed to deal with interest rate risk.
Describe some examples of interest rate derivatives. How are they used in risk management?
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