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MC Question 14

Which of the following statements are correct?

(1) Interest rate options allow the buyer to take advantage of favourable interest rate movements

(2) A forward rate agreement does not allow a borrower to benefit from a decrease in interest rates

(3) Borrowers hedging against an interest rate increase will buy interest rate futures now and sell them at a future date

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3