bond quiz false

NakedPuts

A is offering to lend at a floating rate of LIBOR plus 150 basis points, reset every six
months, with a maximum allowable increase of 300 basis points over the initial lending rate, for the life of the loan. B tells the way to deal with risk
how to deal Cap Risk: Issue floating rate CDs that cannot be withdrawn prior to maturity.
Floating rate CDs would eliminate cap risk.

true or false