Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMA Exam CIMAPRA19-F03-1 Topic 5 Question 101 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 101
Topic #: 5
[All CIMAPRA19-F03-1 Questions]

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?

Show Suggested Answer Hide Answer
Suggested Answer: A, B, C

by Wenona at Oct 18, 2024, 09:38 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel
Velda
2 months ago
Hah, G must be a finance ninja, wielding those options like throwing stars! I'd say C, D, and E are the way to go. Gotta keep those rates in check, no matter what the market throws at you.
upvoted 0 times
...
Karl
2 months ago
What is this, a finance quiz or a magic trick? G must be a real wizard, juggling all these interest rate options. I'll go with C, D, and E - they're clearly hedging their bets like a pro.
upvoted 0 times
Ruthann
2 months ago
E) G is concerned that interest rates may fall below 10%.
upvoted 0 times
...
Herschel
2 months ago
D) G is concerned that interest rates may rise above 8.5%.
upvoted 0 times
...
Jonelle
2 months ago
C) G is concerned that interest rates may rise above 10.0%.
upvoted 0 times
...
...
Margo
3 months ago
Hmm, this is a tricky one. I'd go with C, D, and E. G is just playing it safe, trying to cover all their bases. Better safe than sorry, amirite?
upvoted 0 times
Nada
2 months ago
C) G is concerned that interest rates may rise above 10.0%.
upvoted 0 times
...
Britt
2 months ago
B) G's strategy is to ensure that its interest rates lie between 8.5% and 10.0%.
upvoted 0 times
...
Cassie
2 months ago
A) G 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.
upvoted 0 times
...
...
Anthony
3 months ago
I'm going with B, C, and E. Gotta keep those interest rates in the sweet spot, you know? Can't have 'em too high or too low.
upvoted 0 times
Keneth
2 months ago
C) G is concerned that interest rates may rise above 10.0%.
upvoted 0 times
...
Lynna
2 months ago
B) G's strategy is to ensure that its interest rates lie between 8.5% and 10.0%.
upvoted 0 times
...
Nydia
2 months ago
A) G 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.
upvoted 0 times
...
...
Man
3 months ago
I agree. It seems like G is being cautious with their options.
upvoted 0 times
...
Jillian
3 months ago
Yeah, that makes sense. They probably want to cap their losses.
upvoted 0 times
...
Fausto
3 months ago
I think G is trying to protect against interest rates going too high.
upvoted 0 times
...
Vicki
3 months ago
A, C, and E seem like the most reasonable options. G is trying to hedge against interest rate increases while still benefiting from decreases. Not a bad strategy!
upvoted 0 times
Herman
2 months ago
E) G is concerned that interest rates may fall below 10%.
upvoted 0 times
...
Myra
2 months ago
C) G is concerned that interest rates may rise above 10.0%.
upvoted 0 times
...
Jettie
2 months ago
A) G 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.
upvoted 0 times
...
...

Save Cancel