A futures hedge against interest-rate changes generally requires a bank to take an opposite position in the futures market from its current position in the cash market.

Question

Quizplus · Accepted Answer

This is true. In order to hedge against interest-rate changes, a bank will take an opposite position in the futures market from its current position in the cash market. This is done to offset any potential losses that may occur due to changes in interest rates.

A Futures Hedge Against Interest-Rate Changes Generally Requires a Bank