It consists of a series of four short descriptions of financial futures as hedging vehicles: the savings and loan hedges extension three months money market certificates GKO futures, corporate debt issuer hedging value of the future debt issue with T-bond futures, stock investors hedge market decline, and an example of a company with a natural hedge of interest rate on the balance sheet. Examples describe the details of T-bills, T-bond, and the S & P 500 stock index futures. Issues considered include the variation margin and basis risk (due to differences in the securities of the underlying cash and futures positions, changes in transport, etc.). "Hide
by Scott P. Mason, Sally E. Durdan Source: Harvard Business School 23 pages. Publication Date: March 28, 1986. Prod. #: 286109-PDF-ENG
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