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CIMA Financial Strategy F3 Question # 49 Topic 5 Discussion

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CIMA Financial Strategy F3 Question # 49 Topic 5 Discussion

F3 Exam Topic 5 Question 49 Discussion:
Question #: 49
Topic #: 5

G purchased a put option that grants the right to cap the interest on a loan at 10.0%. Simultaneously, G sold a call option that grants the holder the benefits of any decrease if interest rates fall below 8.5%.

Which THREE possible explanations would be consistent with G's behavior?
A.

G is willing to risk the loss of savings from a fall in interest rates if that offsets the cost of limiting the cost of rises.

B.

G's strategy is to ensure that its interest rates lie between 8.5% and 10.0%.

C.

G is concerned that interest rates may rise above 10.0%.

D.

G is concerned that interest rates may rise above 8.5%.

E.

G is concerned that interest rates may fall below 10%.

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Actual exam question for CIMA F3 exam by Solis5006 at Dec 17, 2025, 9:30:08 AM

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