Which of the following bond option positions increase in value when interest rates increase?

Name: Which of the following bond option positions increase in value when interest rates increase?
Brand: Quizplus
Rating: 4.8 (54 reviews)

Question

Quizplus · Accepted Answer

When interest rates increase, the value of bonds decrease. Therefore, a long put option position (which gives the holder the right to sell bonds at a fixed price) and a written call option position (which obligates the writer to sell bonds at a fixed price) will increase in value.

Which of the Following Bond Option Positions Increase in Value