A Call Option on Eurodollar Deposit Futures Is Most Likely

question 83

Multiple Choice

A call option on Eurodollar deposit futures is most likely to be used by a bank to:

• A)protect the value of its fixed-rate loans and securities.
• B)offset a negative interest-sensitive gap.
• C)offset a positive duration gap.
• D)offset a negative duration gap.
• E)speculate on the rising interest rates.

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Definitions:

Botanicals

Plant parts or extracts used in the pharmaceutical, food, and cosmetics industry for their medicinal or aromatic properties.

Carbamates

A group of organic compounds derived from carbamic acid, used in pesticides and pharmaceuticals.

Synthetic Pesticides

Man-made chemicals designed to control pests, differing from natural pesticides in their creation in laboratories and often showing increased potency.

Food Supplies

The total amount of food available for consumption by a population, encompassing production, distribution, and storage systems.