上一主题:Reading 70: Option Markets and Contracts LOSf习题精选
下一主题:Reading 70: Option Markets and Contracts LOSd习题精选
返回列表 发帖

Reading 70: Option Markets and Contracts LOSe习题精选

LOS e: Define interest rate caps, floors, and collars.

An investor who bought a floating-rate security and wishes to establish a minimum periodic cash flow on his investment could:

A)
buy an interest-rate floor.
B)
sell an interest-rate floor.
C)
sell an interest-rate cap.



The buyer of a floor will receive a payment when the floating rate is below the floor rate, effectively establishing a minimum rate on the floating rate security.

 

Buying an interest-rate cap and selling an interest-rate floor is equivalent to:

A)
buying a series of interest-rate puts and selling a series of interest rate calls.
B)
buying a series of interest-rate calls and selling a series of interest-rate puts.
C)
buying a series of interest-rate puts and calls.



A cap is equivalent to a series of (long) interest-rate calls and selling a floor is equivalent to selling a series of interest-rate puts.

TOP

The owner, of an interest-rate cap will:

A)
be required to make a payment if the market rate exceeds the cap rate.
B)
receive a payment if the market rate is less than the cap rate.
C)
receive a payment if the market rate exceeds the cap rate.



An interest-rate cap will pay its owner the maximum of zero or the market rate minus the cap rate, times the notional principal.

TOP

返回列表
上一主题:Reading 70: Option Markets and Contracts LOSf习题精选
下一主题:Reading 70: Option Markets and Contracts LOSd习题精选