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Explain the interest rate risk faced by the company

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Reference no: EM132803332

Problem 1: A company is raising money using a bill facility and wants to use a swap to hedge their interest rate risk. Explain:

1. the interest rate risk faced by the company;
2. how a swap can be used to hedge this risk; and
3. how the swap impacts the interest and principal repayments of the underlying bill facility.

Reference no: EM132803332

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