You Think That Market Interest Rates Are Going to Fall

question 50

Multiple Choice

You think that market interest rates are going to fall. In order to make money (or to reduce losses) , you could _______________.

• A) Buy a put option on Treasury bonds.
• B) Sell a put option on Treasury bonds.
• C) Buy an interest rate cap.
• D) Sell a Treasury bond futures contract.
• E) Sell a call option on Treasury bonds.

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Definitions:

Compulsive Consumption

is the excessive shopping behavior characterized by an uncontrollable urge to buy, often leading to personal, social, or financial problems.

Impulse Buying

The act of purchasing items on the spur of the moment, driven by emotional rather than rational decision-making processes.

Counterfeiting

The illegal replication of products, currency, or documents with the intent to deceive or defraud by passing off the imitation as genuine.

Fake Versions

Non-genuine imitations of products, often of lower quality and illegally produced, intended to deceive consumers.