G purchased a put option that grants the right to cap the interest on a...

G has effectively created an interest rate collar:

Buys a cap at 10% (protects against high rates).

Sells a floor at 8.5% (gives up benefit if rates fall too low, to reduce cost).

So:

A – True: G sacrifices gains from falling rates to help fund the cap.

B – True: the structure keeps G’s effective borrowing rate between 8.5% and 10%.

C – True: the main concern is rates rising above 10%, hence the cap.

D and E misinterpret the direction of the concern.