JustbrowsingCorp. will need to take out a 120-day, $ 200,000 loan 60 days from now. To protect against interest rate ________(increases/decreases), the corporation should buy an interest rate ________(call/put) option with the premium payed on day t=_____________.

The option has X=8.26% and expires in 60 days.

The corporation will make a decision on day t= ______________about whether or not to exercise the option. On this day the applicable(spot)interestrateis 9.15%. The corporation _______________(should/should not) exercise the option. Payoff will be $_____________(rounded to two decimals) on day t=._________