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Question
A corporation plans to issue long-term bonds two months from now. To protect itself against a rise in interest rates, the corporation can buy put options. If interest rates rise, the interest cost of the bonds issued two months from now will be ________, but the put option will have ________ in value.A) higher; decreased
B) lower; increased
C) higher; increased
D) lower; not changed
Answer
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Related questions
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To show how to calculate the hedge ratio, we use notation that includes the following: ________.
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D) a speculative portfolio.
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