A Buyer of a Put Option on Fixed-Income Securities Is

question 37

Multiple Choice

A buyer of a put option on fixed-income securities is most likely to:

• A)exercise the option if interest rates rise.
• B)let the option expire if the interest rates rise.
• C)exercise the option if interest rates fall.
• D)exercise the option if interest rates remain constant.
• E)buy a call option also on the same securities.

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Definitions:

Dual-Coding Hypothesis

The assertion that long-term memory can code information in two distinct ways, verbally and visually, and that items coded both ways (e.g., pictures and concrete words) are more easily recalled than items coded in only one way (e.g., abstract words).

Remember

The cognitive process of recalling information or experiences from the past.

Word Pairs

A method used in memory studies, where two words are presented together as a pair to be remembered by the participant.

Mirror Image Reversal

The phenomenon where an image or object is reversed from left to right, as seen in a mirror reflection.