An instrument developed to help investors and institutions hedge interest-rate risk is

Question

Quizplus · Accepted Answer

Financial derivatives are specifically designed to provide risk management to investors and institutions. They can be utilized to hedge against interest-rate risk, among other risks. Put and call options can also be used for hedging, but they are not specific to interest-rate risk. Mortgage-backed securities are a type of fixed-income security and can be impacted by interest-rate changes but are not used as a hedging instrument.

An Instrument Developed to Help Investors and Institutions Hedge Interest-Rate