April 2009 Question 5

Discussion in 'SP2' started by dChetty, Apr 11, 2016.

  1. dChetty

    dChetty Member

    The solution says:


    "There would be a need to keep rebalancing the derivate position over time as interest rates moved". Why is the company concerned about interest rates moving if the company has guaranteed the interest rate and the swap will take care of this?
    " Also need to keep rebalancing as the expected take-up rate at vesting will alter over time as will the expected funds under management at the time of vesting". Please explain.
     

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