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• Suppose a borrower, Syarikat ABC, has a 5-year, RM 10 million loan from Maybank

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• Suppose a borrower, Syarikat ABC, has a 5-year, RM 10 million loan from Maybank.

• Maybank charges an interest based on 6-month KLIBOR + 2% payable semi-annually.

• The firm’s funding costs will increase as 6-month KLIBOR rises.

How can the firm hedge?