n NISM Certifications
NSM General NISM
Medium

If you anticipate the 3-month interest rate to increase in one month, which action is appropriate to take today?

Practice question from NISM Series IV - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Buy the contract expiring in three months on an asset sensitive to 1-month interest rate

  2. B

    Buy the contract expiring in one month on an asset sensitive to 3-month interest rate

  3. Sell the contract expiring in one month on an asset sensitive to 3-month interest rates (Correct)

    Correct answer

  4. D

    Sell the contract expiring in three months on an asset sensitive to 1-month interest rates

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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