Chpt 8 Interest Rate Risk Flashcards

1
Q

Interest rate guarantee

Borrowing co

A

Buy call option

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2
Q

Interest rate guarantee

Investing company

A

But put option

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3
Q

Interest rate options

Borrowing company

A

Buy put option

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4
Q

Interest rate options

Lending company

A

Buy call option

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5
Q

Bid

A

Pay for receiving LIBOR

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6
Q

Ask

A

Receive in exchange for paying LIBOR

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