Which of the following T-bond option positions increase in value when interest rates increase?

Select one:

a.

Buy put; write call

b.

Write put; write call

c.

But put; buy call

d.

Buy call; write put

In an adjustable-rate mortgage, the ______________ bears the interest rate risk; in a fixed-rate mortgage, the ____________ bears the interest rate risk.

Select one:

a.

lender; borrower

b.

borrower; lender

c.

lender; lender

d.

borrower; borrower

e.

federal government; consumers

What measures do exchanges use to minimize the default risk of futures contracts?

Select one:

a.

All of the listed options

b.

Daily marked to market

c.

None of the listed options

d.

Margin requirements

e.

Price movement limits

You obtain a 15-year fixed-rate mortgage of $240,000 from a bank. The bank asks for a national average annual rate of 2.50 percent. What is your monthly mortgage payment (to the nearest dollar)?

Select one:

a.

$1,427

b.

$1,757

c.

$1,600

d.

$1,321

e.

$1,546