The yield curve sharp that resulted when short-term interest rates are lower than longer-term rates is :

a) Normal

b) Inverse

c) Flat

d) Trenched

In order to control the inflation rate a lot of central banks in different countries have been increasing their cash rates. This has resulted in increasing borrowing cost. A borrower who is currently having a competitive advantage in the variable rate market is looking for a derivative to fix their rate. Which of the following instrument should the investor look into?

a) Swap contract

b) Call option

c) Put option

d) None of the option here is correct

Answer rating: 100% (QA)

The detailed answer for the above question is provided below ANSWER 1 A Normal A steep yield curve i... View the full answer