A long position in an interest rate call would be appropriate for which of the following situations:
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Question:
A. a bond trader expects falling interest rates
B. a borrower expects rising interest rates
C. a lender expects rising interest rates
D. a derivatives dealer is exposed to the risk of falling interest rates
E. a party holding a short position in Eurodollar futures is concerned about losing money
Expert Answer:
A long position in an interest rate call is a bet that the price of the underlying ... View the full answer
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