Buying a call option on a bond ensures an FI that it will be able to sell the bond at a given point in time for a price at least equal to the exercise price of the option.
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Q2: Unlike futures and forward contracts, the use
Q3: FIs may increase fee income by serving
Q4: The most a call option buyer stands
Q5: The maximum potential loss to a buyer
Q6: Unlike futures contracts, options are traded electronically
Q8: When interest rates rise, writing a bond
Q9: The profit on bond call options moves
Q10: Selling an interest rate call option may
Q11: The trading process of options is the
Q12: The potential gain to the seller of
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