4 ms·
How do they deal with interest rate fluctuations?
by fallentimes 17y ago
How do they deal with interest rate fluctuations?
- ars 17y agoYou buy long term (5-10 years) CD's. You know your expenses pretty well, so it's easy to plan it that far ahead. Or coupon bonds, which pay interest regularly with a fixed amount and on a fixed schedule (set at purchase time for as long as 30 years). Slightly more risky since they are not FDIC insured, but if you hold to maturity you have zero risk due to market fluctuations, only a risk of the firm going bankrupt totally.