CIMA Exam CIMAPRA19-F03-1 Topic 3 Question 107 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 107
Topic #: 3

G purchased a put option that grants the right to cap the interest on a loan at 10.0%. Simultaneously, G sold a call option that grants the holder the benefits of any decrease if interest rates fall below 8.5%.

Which THREE possible s would be consistent with G's behavior?

AG is willing to risk the loss of savings from a fall in interest rates if that offsets the cost of limiting the cost of rises.

BG's strategy is to ensure that its interest rates lie between 8.5% and 10.0%.

CG is concerned that interest rates may rise above 10.0%.

DG is concerned that interest rates may rise above 8.5%.

EG is concerned that interest rates may fall below 10%.

Show Suggested Answer

Suggested Answer: A, B, C

by Kassandra at Mar 03, 2025, 11:23 PM

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