1 as interest rates increase the writer of a bond call, Ask an Expert

Finance

1. As interest rates increase, the writer of a bond call option stands to make

limited gains.

limited losses.

unlimited losses.

unlimited gains.

Answers A and B only.

2. A US bank has fixed-rate assets in US dollars and variable-rate liabilities in Euros. This bank is exposed to

interest rate increases and an appreciation of the dollar.

interest rate declines and an appreciation of the dollar.

interest rate increases and a depreciation of the dollar.

interest rate declines and a depreciation of the dollar.

zero exposure to interest rate and exchange rate exposures.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92800028

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