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Sir, in question Massie (sept/dec 2015), are we buying a put or call option? I solved it by buying a put option but my answer was wrong.
Thanks
They are investing money and when investing money we always buy call options (because when interest rates fall, the value of futures will increase and therefore call options will give a gain to ‘cancel’ the loss resulting from the lower interest.
Please watch my free lectures on interest rate risk management – I explain how the options work and why we would buy call options in this case.
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