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Interest Rate Guarantee

The idea of an IRG – Interest-Rate Guarantee – is to provide the purchaser with a one-time stipulation of a future interest rate (in the form of an FRA transaction).



Again, this generally involves securing against increased rates (IRG Call), but it is of course also possible to offer an IRG Put. This is essentially a tangent of a Cap, or in other words, each Cap consists of a series of IRG.
 
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