Which of the following can be used to reduce interest rate risk over a long period of time?
A)an interest rate futures agreement
B)an interest rate swap agreement
C)a put option
D)a call option

Question

Quizplus · Accepted Answer

An interest rate swap agreement can be used to reduce interest rate risk over a long period of time. This is because it allows for the exchange of fixed-rate and floating-rate interest payments, which can provide protection against changes in interest rates. The other options listed are primarily used for shorter-term hedging strategies.

Which of the Following Can Be Used to Reduce Interest