Call option considering interest rates and have multiple exercise dates is classified as
A. floor
B. cap
C. swaps multiplier
D. notion multiplier
Answer: Option B
Solution (By Examveda Team)
Call option considering interest rates and have multiple exercise dates is classified as cap. A cap is a package of interest rate options whereby, at each of a series of future fixing dates, if an agreed reference rate such as LIBOR is higher than the strike rate, the option buyer receives the difference between them, calculated on an agreed notional principal amount for the period until the next fixing date.This Question Belongs to Management >> International Finance And Treasury
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