The forward contract you would enter into to hedge the interest rate risk on these bonds over the coming year if the
Context Introduction:
A non-standardized agreement between seller and buyer to sell or buy a commodity at a specified price on a future date is called “Forward Contract”. This agreement is used to minimize the risk of adverse fluctuation in the price of a commodity (hedging purposes).
Treasury bonds are fixed-interest debt security. They have the maturity of more than 10 years and pay interest semi-annually until their maturity. After maturity, the face value of Treasury bond is paid.
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