Multiple Choice
The writer of an interest rate cap:
A) has the obligation to sell the underlying bond at a fixed price
B) has the obligation to buy the underlying bond at a fixed price
C) has the obligation to pay (the spot rate minus the strike rate) times the notional
D) has the obligation to pay (the spot rate minus the strike rate) times the notional in case it's a positive number
E) has the obligation to pay (the strike rate minus the spot rate) times the notional in case it's a positive number
Correct Answer:
Verified
Correct Answer:
Verified
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