Interest Rate Derivatives Overview

Interest rate risk management is becoming increasingly important not just for the financial sector, but for the household sectors as well. Interest rate derivative products are the primary instruments available to manage such risks.

     “Interest Rate Derivatives: A Beginner’s Module aims at creating a better understanding of the concepts underlying the money market and giving insights into the motives of and operations related to the trading of interest rate derivatives.”

Course Highlights

  • Students
  • Teachers
  • Employees of Banks, Insurance Companies”
  • Primary Dealers
  • Employees of Brokers/Sub-Brokers
  • Anybody having interest in the Indian money market
  • To understand the concept of money market
  • To understand the interest rate derivatives as a risk management tool

Duration: 120 minutes

No. of questions: 60

Maximum marks: 100, Passing marks: 50 (50%); There is no negative marking in this module.

Certificate validity: For successful candidates, certificates are valid for 5 years from the test date.


Module Fees GST @ 18% Total Fees
1700 306 2006

 Total Fees : Rs.2006/- (Rupees Two Thousand and Six Only). inclusive of GST.

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Interest Rate Derivatives Syllabus


Interest Rates and Time Value Of Money

Introduction; Factors affecting the level of in erest rate; Impact and classification of interest rate and Present value, Future value and Discount factor.

Money and Fixed Income Markets

Money markets and Fixed income markets.

Government Bonds

Introduction to and Characteristics of Bonds; Concept of yield; Relationship between bond price and interest rate; Repo and cost of funding and other bond terminology.

Interest Rate Derivatives

OTC Derivatives; Exchange traded contracts and key terminology of futures market.

Interest Rate Futures (IRF) in India

Interest rate futures; Rationale; Contract specifications; Settlement and Risk Management.

An Explanation of Key Concepts in IRF

Why a notional bond is being used as underlying; Conversion factor; Invoice price; Cheapest to deliver bond; Bond basis.

Applications and Trading of Interest Rate Futures

Participants in the IRF market; Hedging applications of interest rate derivatives; Speculation and Arbitrage strategy.

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