Today, interest rate swaps are often used by firms to alter their exposure to interest-rate fluctuations, by swapping fixed-rate obligations for floating rate obligations, or vice versa.

This locks in the interest rate, insulating the company from any gains or losses caused by interest-rate fluctuations that might occur until the mortgage is sold.

In its years of rapid growth, Franklin relied heavily on techniques designed to reduce the risk of loss from interest-rate fluctuations.

"You'll have plain vanilla interest-rate fluctuations," said Richard B. Hoey, chief economist and portfolio manager of the Dreyfus Corporation.

Because adjustable rates respond slowly to interest-rate fluctuations, some homeowners could save up to $30,000 in interest payments over the life of a typical 30-year $100,000 mortgage by switching to a fixed rate.

The culprit is the variable-rate loan, which has proliferated in several forms in the last few years as banks have sought to protect themselves from interest-rate fluctuations by passing them on to consumers.

They cite the great success of the secondary market in home mortgages in holding down rates and permitting thrift institutions and other mortgage lenders to protect themselves against interest-rate fluctuations.

Banks and brokerage firms, which are sensitive to interest-rate fluctuations, were lower.

It also allowed the industry to offer adjustable-rate mortgages to help protect itself from interest-rate fluctuations.

The Hong Kong market is extra sensitive to interest-rate fluctuations because so many stocks are in real estate or banking.