Explain the types of cash flow characteristics that would cause a firm to hedge interest rate risk by swapping floating-rate payments for fixed payments. Why would some firms avoid the use of interest rate swaps even when they are highly exposed to interest rate risk?
Explain the difference between a freely floating system and a dirty float. Which type is more representative of the U.S. system?
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Explain the use of the federal funds market in facilitating bank operations.
Do all commercial borrowers receive the same interest rate on loans