Understanding cash payments is crucial in the world of finance. These payments are made on a daily basis and are affected by the spot rate, which can either be above or below an agreed-upon forward rate. To manage the risk associated with these payments, Eurodollar futures can be used for hedging. By utilizing these futures, investors can protect themselves against potential losses and secure their cash flow. This is just one example of how finance professionals use various tools to mitigate risk and ensure financial stability.
