General Studies · Risk Management
Regarding interest rate risk management for a company, which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Taking out a variable rate overdraft will allow a company to hedge interest rate risk through matching.
- 2A company can hedge its interest rate risk by buying interest rate futures now in order to sell them at a future date.
- 3Buying a floor will give a company a hedge against interest rate increases.
- 4In exchange for a premium, a company could hedge its interest rate risk by buying interest rate options.✓
Correct answer
In exchange for a premium, a company could hedge its interest rate risk by buying interest rate options.
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