Multiple Choice
How can a bank hedge when it makes 1-year fixed-rate loans and finances them with 3-month floating-rate deposits?
A) Buy Eurodollar futures contracts.
B) Sell put options on Eurodollar futures contracts.
C) Sell Eurodollar futures contracts.
D) Buy call options on Eurodollar futures contacts.
E) b. and c.
Correct Answer:
Verified
Correct Answer:
Verified
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