A Long Position in an Interest Rate Call Would Be

question 32

Multiple Choice

A long position in an interest rate call would be appropriate for which of the following situations:

• A)a bond trader expects falling interest rates
• B)a party holding a short position in Eurodollar futures is concerned about losing money
• C)a borrower expects rising interest rates
• D)a lender expects rising interest rates
• E)a derivatives dealer is exposed to the risk of falling interest rates

---

Definitions:

Distribution

The way in which values in a dataset are spread out or clustered across a range.

Variability

Variability is a statistical concept that describes the extent to which data points in a data set differ from each other and from the average or mean value of the set.

Measure

A tool or instrument used to quantitatively assess or determine the extent, dimensions, quantity, or capacity of something.

Manipulation

The act of controlling or influencing a person, situation, or system often in a skillful manner.