Selling an Interest Rate Call Option May Hedge an FI

question 44

True/False

Selling an interest rate call option may hedge an FI when rates rise and bond prices fall.

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Definitions:

BIOS Password

A BIOS password is a security feature that can be used to prevent unauthorized access to a computer by requiring a password check during the boot process.

Motherboard Jumper

A small connector used to close an electrical circuit on a motherboard, often for configuring hardware settings or resetting BIOS.

CMOS Battery

A small battery on a computer motherboard that provides power to the CMOS chip, retaining system settings such as the date and time when the computer is off.

Disgruntled Employee

An employee who is dissatisfied or frustrated with their job, which might result in decreased productivity or malicious behavior towards the company.