Question 17

Which of the following statement about interest rate derivatives is false?

Both being long in an FRA or being long an interest rate call means that you are the party receiving the floating rate.

FRA and interest rate option payoffs are both due at the derivative instruments expiration date.

In an interest option one party has a right and the other has an obligation while in an FRA both parties have an obligation.

The seller of an interest rate call has the obligation to receive fixed and pay a floating rate, whenever the holder wants to exercise his option.