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A Lender,worried That the Value of Their Loan Might Fall

Question 46

Multiple Choice

A lender,worried that the value of their loan might fall during the term of the loan,can hedge this fall by:


A) buying futures contracts on Treasury bonds.
B) selling futures contracts on Treasury bonds.
C) buying Treasury bonds on the spot market.
D) increasing now the amount of money that has been lent.

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