If a bank manager wants to protect the bank against losses that would be incurred on its portfolio of treasury securities should interest rates rise, he could ________.

Question

Quizplus · Accepted Answer

Buying put options on financial futures would provide the bank manager with the right to sell Treasury futures contracts at a specified price if interest rates rise, which would allow the bank to limit potential losses on its portfolio of Treasury securities.

If a Bank Manager Wants to Protect the Bank Against