Editing Interest rate derivative (section)

===Linear and non-linear===
Linear IRDs are those whose net present values (PVs) are overwhelmingly (although not necessarily entirely) dictated by and undergo changes approximately proportional to the one-to-one movement of the underlying interest rate index. Examples of linear IRDs are; [[interest rate swap|interest rate swaps (IRSs)]], [[forward rate agreement|forward rate agreements (FRAs)]], [[zero coupon swap|zero coupon swaps (ZCSs)]], [[cross currency swap|cross-currency basis swaps (XCSs)]] and [[single currency basis swap|single currency basis swaps (SBSs)]].

Non-linear IRDs form the set of remaining products. Those whose PVs are commonly dictated by more than the one-to-one movement of the underlying interest rate index. Examples of non-linear IRDs are; [[swaption]]s, [[interest rate cap|interest rate caps and floors]] and [[constant maturity swap|constant maturity swaps (CMSs)]]. These products' PVs are reliant upon volatility so their pricing is often more complex as is the nature of their risk management.