The buyer of a put option on Treasury bonds:
A) Is hedging against a decline in the price of Treasury bonds
B) Can lose the entire amount of the contract if rates move adversely
C) Has an unlimited time in which to exercise the options
D) Determines the strike price if the option is traded on the exchange
E) Will profit if interest rates fall

Question

Quizplus · Accepted Answer

The Answer of The buyer of a put option on Treasury bonds:
A) Is hedging against a decline in the price of Treasury bonds
B) Can lose the entire amount of the contract if rates move adversely
C) Has an unlimited time in which to exercise the options
D) Determines the strike price if the option is traded on the exchange
E) Will profit if interest rates fall

The Buyer of a Put Option on Treasury Bonds