In Regards to Interest Rate Options, Which of the Below

question 33

Multiple Choice

In regards to interest rate options, which of the below statements is TRUE?

• A) Interest rate options cannot be written on cash instruments or futures.
• B) At one time, there were several exchange-traded option contracts whose underlying instrument was a debt instrument. These contracts are referred to as futures on physicals.
• C) In recent years, market participants have made decreasingly greater use of over-the-counter options on Treasury, agency debentures, and mortgage-backed securities.
• D) Besides options on fixed-income securities, investors can obtain OTC options on a yield spread.

---

Definitions:

Federal Bureaucracy

The collection of government agencies and departments that carry out policies and administer public programs at the national level.

Appointing Officials

The process of choosing individuals to hold specific positions of authority in organizations, often within the government.

Agency's Budget

An agency's budget refers to the financial plan for a specific governmental agency, outlining expected revenues and expenditures.

Oversight

The process of monitoring and directing activities or operations, often used in the context of government oversight over agencies and departments.