SIE - Securities Industry Essentials Exam
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An options trader wants to profit from potential interest rate declines in the 10 year note. The trader could
Buy 10 Year note calls
A
Buy 10 Year note puts
B
Buy a straddle
C
Sell a strangle
D
Explanations
Remember that the yield and bond prices move inversely to one another. The correct answer is to buy 10 Year note calls.