  By adopting the polynomial interpolation method, we propose an approach to
hedge against the interest-rate risk of the default-free bonds by measuring the
nonparallel movement of the yield-curve, such as the translation, the rotation
and the twist. The empirical analysis shows that our hedging strategies are
comparable to traditional duration-convexity strategy, or even better when we
have more suitable hedging instruments on hand. The article shows that this
strategy is flexible and robust to cope with the interest-rate risk and can
help fine-tune a position as time changes.
