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Suppose a company is paying a borrowing rate tied to the T-bond yield. It wants to hedge against its borrowing rate increase in the future but it wants to keep its rate, if the rate goes down. Which interest rate derivative should it use?

a) eurodollar futures

b) T Bond futures

c) Interest rate floor

d) Swaption

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91825882

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