{"categories":["Risk Management"],"contentHtml":"<h4>Lecture Notes</h4><h5>Lab 4</h5><p>Notes added to lab 4 and discussion which delves into the analytic part establishing the connection between the two.</p><h5>Futures/Forwards</h5><p>Futures are less flexible because they are standardized, and you have to announce the price constantly because you’re on the open market.</p><p>The forward contract you sleep for a year, wake up, and they honor an agreement.</p><h5>Hedging Bonds</h5><p>The <math><mi>𝛽</mi></math> on bonds is the duration.</p><p>If we zoom in very far, we can see the earth is flat and get the slope (derivative).</p><p>As rates go up, bond prices go down.</p>","contentSourceFormat":"typst","contentTypst":"=== Lecture Notes\n<lecture-notes>\n==== Lab 4\n<lab-4>\nNotes added to lab 4 and discussion which delves into the analytic part establishing the connection between the two.\n\n==== Futures/Forwards\n<futuresforwards>\nFutures are less flexible because they are standardized, and you have to announce the price constantly because you're on the open market.\n\nThe forward contract you sleep for a year, wake up, and they honor an agreement.\n\n==== Hedging Bonds\n<hedging-bonds>\nThe $beta$ on bonds is the duration.\n\nIf we zoom in very far, we can see the earth is flat and get the slope (derivative).\n\nAs rates go up, bond prices go down.","dataUrl":"https://sharifhsn.dev/api/posts/bond-hedging.json","date":"2024-12-05","datePublished":"2024-12-05","description":"Notes added to lab 4 and discussion which delves into the analytic part establishing the connection between the two. Futures are less flexible because they are standardized, and…","site":"https://sharifhsn.dev","slug":"bond-hedging","source":"FE-535 | Risk Management","sourceUrl":null,"tags":["Risk Management","Bonds","Hedging"],"title":"Hedging Bonds","url":"https://sharifhsn.dev/blog/bond-hedging/","version":"1","wordCount":96}