Generally,which of the Following Is FALSE Regarding Interest Rate Risk

question 10

Multiple Choice

Generally,which of the following is FALSE regarding interest rate risk management techniques?

• A)Borrowers can protect themselves from upward movements in interest rates by using interest rate caps
• B)Borrowers can protect themselves from upward movements in interest rates by using interest rate futures contracts
• C)Borrowers can benefit from downward movements in interest rates by using interest rate caps
• D)Borrowers can benefit from downward movements in interest rates by using interest rate futures contracts

---

Definitions:

Defense Mechanism

A psychological strategy unconsciously used to protect a person from anxiety arising from unacceptable thoughts or feelings.

Denial

A defense mechanism in which confrontation with a reality is avoided by denying the existence of the problem or reality.

Projection

A defense mechanism in psychology where an individual attributes their own unacceptable thoughts, feelings, or motives to another person.

Defense Mechanism

Psychological strategies brought into play by individuals, groups, or even nations to cope with reality and to maintain self-image.