WASHINGTON – The market value on long-term fixed rate securitiescan depreciate quickly during a rising interest rate environmentbut is there an alternative for credit unions? Callahan &Associates, Inc. said in a rapidly rising rate environment, “themarket value on long-term fixed rate securities can depreciatequickly and the bond markets are not a forgiving place forinvestors who find themselves long and wrong.” If variable ratesecurities are sought as relief, Callahan said credit unions shouldremember to define the attributes of the investment; list the prosand cons, risk and return, and evaluate within the context of theexisting portfolio. “Each one of these rules requires differentanalytical techniques and as the complexity of the instrumentsexpands, so does the analysis required to assess the instruments,”Callahan advised. “For example, in variable rate securities youcome across a whole host of terms germane to this sector, like cap,floor and collar risk.”