Which of the following is a good strategy to adopt when interest rates are expected to rise?
A)Buying a call option on a bond.
B)Writing a call option on a bond.
C)Writing a put option on a bond.
D)Buying bond futures.
E)All of the options.

Question

Quizplus · Accepted Answer

Writing a call option on a bond can be beneficial when interest rates are expected to rise because bond prices typically fall as interest rates increase, making it less likely that the call option will be exercised.

Which of the Following Is a Good Strategy to Adopt