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A Bank Seeking to Avoid Lower Than Expected Yields from Loans

Question 90

Multiple Choice

A bank seeking to avoid lower than expected yields from loans and security investments is most likely to use:


A) a short position or selling hedge in futures.
B) a long position or buying hedge in futures.
C) a long position in put option on futures contracts.
D) a long position or buying hedge in futures and a long position in put option on futures contracts.
E) None of the options are correct.

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