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    Bank Management Study Set 1
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    Exam 9: Using Derivatives to Manage Interest Rate Risk
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    A Bank Can Establish a Floor on Interest Rate Costs
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A Bank Can Establish a Floor on Interest Rate Costs

Question 3

Question 3

Multiple Choice

A bank can establish a floor on interest rate costs by:


A) buying a call option on Eurodollar futures.
B) selling Eurodollar futures contracts.
C) selling a call option on Eurodollar futures.
D) a. and b.
E) b. and c.

Correct Answer:

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