Which of the Following Statements Is Correct

Multiple Choice

Which of the following statements is correct?

A) The buyer of an interest rate cap earns an amount on each payment date that is equal to the cap rate (or the strike rate) on the contract times the notional.
B) The buyer of an interest rate cap earns an amount on each payment date that is,at a minimum,the cap rate (or the strike rate) on the contract times the notional.
C) The buyer of an interest rate cap earns profits when interest rates decline,so it is contract that is bearish on interest rates.
D) If the buyer of an interest rate cap borrows using a floating rate bond that pays bbalibor,then its borrowing cost in any period is no larger than the cap rate (or the strike rate of the contract) times the notional.
E) If the buyer of an interest rate cap purchases a floating rate bond that earns bbalibor,then it earns the cap rate (or the strike rate) times the notional each payment date.