Back to TermMax Daily Topic: The market always carries risks, but the difference between a mature financial system and an early market lies in: the former prices risk, while the latter bears risk. When interest rates fluctuate, maturities are uncertain, and settlement rules change with the market, participants are essentially exposed to risk; you bear the volatility but may not receive a fair premium; whereas when interest rates and maturities are locked in, risk becomes quantifiable for the first time. For example:
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Back to TermMax Daily Topic: The market always carries risks, but the difference between a mature financial system and an early market lies in: the former prices risk, while the latter bears risk. When interest rates fluctuate, maturities are uncertain, and settlement rules change with the market, participants are essentially exposed to risk; you bear the volatility but may not receive a fair premium; whereas when interest rates and maturities are locked in, risk becomes quantifiable for the first time. For example: