Risk
The Role of Hedging in Risk
Futures hedging, interest rate futures, swaps, and currency swap mechanics
4 CPD credits on completion
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Certificate on completion
Downloadable resources
Self-paced learning
About This Course
Course Information
This course describes interest rates and Treasury bonds in relation to forward and futures prices, along with the use of interest rate futures in hedging. The mechanics, types, and the pricing of swaps contracts used for hedging are also described.
Certificate on Completion
This course is made up of videos, questions and additional reading materials, and accounts for 4 units of CPD. One unit is the equivalent of one hour of learning.
Course Sections
This course is made up of the following sections:
- Interest rate futures (video)
- Interest rate futures (quiz)
- Hedging with futures (video)
- Hedging with futures (quiz)
- Interest rate swaps (video)
- Interest rate swaps (quiz)
- Currency swaps (video)
- Currency swaps (quiz)
What You Will Learn
- Explain how futures contracts are used to construct hedges against price risk
- Calculate basis risk and assess its impact on hedging effectiveness
- Describe the mechanics of interest rate futures, including Treasury bond and Eurodollar contracts
- Compare interest rate swaps and currency swaps in terms of structure, cash flows, and applications
- Identify the conditions under which a cross-hedge is appropriate and the risks it introduces
- Apply hedge ratio calculations to determine the number of futures contracts needed for a position
Who This Course Is For
- Finance professionals who manage or oversee hedging activities within their organisations
- Accountants who need to understand derivatives accounting for futures and swap positions
- Risk professionals building on foundational knowledge of financial instruments
Prerequisites
- A working understanding of futures contracts and basic derivatives terminology
- Familiarity with interest rate concepts and how bond prices relate to yield changes
Frequently Asked Questions
Course Details
CPD Credits4
CertificateYes
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CPD certificate on completion
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