Buying a ________ Is Equivalent to Buying a Package of Puts

question 27

Multiple Choice

Buying a ________ is equivalent to buying a package of puts on a fixed- income instrument and buying a ________ is equivalent to buying a package of calls on a fixed-income instrument.

• A) floor (long cap); floor (long floor)
• B) cap (long cap); floor (long floor)
• C) cap (long cap); cap (long floor)
• D) cap (short cap); floor (long floor)