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What's their interest rate exposure? If rates go up 0.5%, what's their paper worth?
by tedunangst 5y ago
What's their interest rate exposure? If rates go up 0.5%, what's their paper worth?
- FabHK 5y agoCommercial paper is usually very short dated (definitely less than a year, average maturity appears to be only 2 months [1]), so if rates move up by a percentage point, the present value of the paper should drop less than 1%, maybe less than 0.2% (if it is very short dated). That's pretty close to their capital though! [1] https://www.federalreserve.gov/releases/cp/maturity.htm https://www.federalreserve.gov/releases/cp/maturity.htm