Sv: Break out in Bonds

["Stig O" <olausson@xxxxxxxxxx>]

I just got this question below. Since I am just a dumb technical analyst I don't know the answer to it.

I know, though, that we have a lot of smart guys on the list. I am also curious to the answer.

Is there an easy way to convert interest rate to price?

regards
stig


>If I have an investment loan for say $1,000,000 at say 7% variable for the
>next 5 years, how does this relate to the bonds?  Could I take an opposite
>long term t-bond contract position, such that if my loan interest rate
>doubled to say 14%, the "profit" in the bond contract would offset the
>"loss" due to increased loan repayments?  Is this even possible, i.e. to
>lock in the interest rate on my loan in this way?
>
>