Onereason that banks use derivatives is to generate ________, the money that does not come from interest earned on loans and securities.
A(n) _________________________ is where there is both a minimum and a maximum interest rate set on a loan.
An interest-rate cap will become more valuable as interest rates rise. true or false?
A(n) _________________________ protects the lender from falling interest rates. It is the minimum rate that the borrower must pay on a floating-rate loan.
- An option buyer can:
Multiple Choice
exercise the option.
sell the option to another buyer.
allow the option to expire.
All of the options are correct.
exercise the option or must sell it to another buyer.