You think that market interest rates are going to fluctuate, but you don't know whether they will go up or down. One thing you could do to limit your risk exposure in either case would be to ______________.
A) sell Treasury bonds on the open market
B) buy Treasury bonds on the open market
C) buy an interest rate collar
D) sell call options and sell put options on Treasury bonds
E) buy Treasury bond futures

Question

Quizplus · Accepted Answer

Buying an interest rate collar is a strategy used to hedge against interest rate fluctuations by setting upper and lower bounds on interest rates, thereby limiting exposure to drastic changes in either direction.

You Think That Market Interest Rates Are Going to Fluctuate