Includes bibliographical references (pages 205-206) and index.

Acknowledgements -- About the author -- Preface -- Introduction -- Key learning points from past derivatives blunders -- Understanding the firm's exposure to interest rate risk -- Four sources of exposure to interest rate risk -- Bank financing as primary source of exposure -- Measuring the impact of interest rate risk on the firm -- The financial markets -- Financial statement impact from interest rate movements -- Hedging makes sense under specific circumstances only -- Hedging theory -- Selecting the best possible derivative -- Interest rate derivatives -- Linear derivatives -- Options -- How to formulate the optimal strategy : the analytical method -- The macrae risk reduction rules(R) -- Afterword -- Appendix i: central case, trader -- Appendix ii: proof of the analytical method -- Appendix iii: MiFID customer protection regulations regarding derivatives -- Notes -- Glossary -- Index.

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