A financial institution would be willing to sell an interest rate cap when
A) they believe that the interest rate in the future will go up and that they will not make any payment.
B) they believe that the interest rate in the future will be stable and they will not make any payments.
C) they believe that the interest rate received on the cap fee will be smaller and they will make no payment.
D) None of the above.
Correct Answer:
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