CHAPTER 9

Interest Rate Futures

CHAPTER OBJECTIVES

After studying this chapter, you should be able to:

  1. Review the basic concepts of interest rates.
  2. Distinguish clearly between the spot interest rate and forward interest rate.
  3. Explain the concept of yield curve.
  4. Discuss the interest rate risk.
  5. Explain different forms of interest rate futures.
  6. Discuss the Forward Rate Agreement.
  7. Understand the RBI Directives on interest rate futures.
  8. Gain insight into interest rate futures trading in India.

Interest Rates: Basic Concepts

This section is a prelude to interest rate futures, another important topic in this chapter. As any discussion on interest rate futures presupposes the familiarity of the reader with key concepts like yield to maturity (YTM), ...

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