A put option on Eurodollar deposit futures is most likely to be used by a bank to:

Question

Quizplus · Accepted Answer

A put option on Eurodollar deposit futures can be used by a bank to offset a negative interest-sensitive gap. If the bank has more rate-sensitive liabilities than assets, it can use the put option to protect against a decrease in interest rates, which would further widen the gap. This way, the bank can limit its interest rate risk exposure and protect against potential losses.

A Put Option on Eurodollar Deposit Futures Is Most Likely