A financial institution that hedges with interest rate futures is less sensitive to economic events than an institution that does not hedge.

Question

Quizplus · Accepted Answer

By hedging with interest rate futures, a financial institution can protect itself from interest rate fluctuations, which can be caused by economic events such as changes in inflation or monetary policy. This reduces the institution's sensitivity to such events and provides a level of stability in its financial position.

A Financial Institution That Hedges with Interest Rate Futures Is