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Basic Question 1 of 1
A call option on interest rates will be in the money when the ______
B. exercise rate is higher than the futures rate.
C. futures rate is higher than the current spot rate.
A. current spot rate is higher than the exercise rate.
B. exercise rate is higher than the futures rate.
C. futures rate is higher than the current spot rate.
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Learning Outcome Statements
calculate and interpret the value of an interest rate option using a two-period binomial model;
CFA® 2025 Level II Curriculum, Volume 5, Module 32.