Series 7 - General Securities Representative Exam
A client believes that long term interest rates will decrease. The client could make a profit by using which TWO of the following strategies?
Buying T-bond Calls and Buying T-bond PutsA
Buying T-bond Calls and Selling T-bond PutsB
Buying T-bond Calls and Selling T-bond CallsC
Buying T-bond Puts and Selling T-bond PutsD
Buying T-bond Calls and Selling T-bond Puts. Interest rates move inversely to bond prices. If rates decrease, the bond price will increase. So, the client could buy calls or sell puts to benefit from the move.