23-33 Exercise of a Put Option on Interest Rate Futures

question 23

True/False

23-33 Exercise of a put option on interest rate futures by the buyer of the option results in the buyer putting to the writer the bond futures contract at an exercise price higher than the currently trading bond future.

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired together; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Operant Conditioning

A learning process where the strength of a behavior is modified by reinforcement or punishment.

Observational Conditioning

A learning process where an individual acquires behaviors by observing and imitating others.

State-Dependent Learning

The theory that information learned in a specific state of mind (e.g., emotional, physiological) is more easily recalled when in that same state.