Buying an interest rate call results in a limited loss if interest rates fall.

Name: Buying an interest rate call results in a limited loss if interest rates fall.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Buying an interest rate call option gives the holder the right, but not the obligation, to benefit from rising interest rates. If interest rates fall instead, the maximum loss is limited to the premium paid for the call option.

Buying an Interest Rate Call Results in a Limited Loss