If a financial manager with an interest liability on a future date were to sell Futures and interest rates end up going down, the position outcome would be:
A) Futures price falls; short earns a profit.
B) Futures price rises; short earns a loss.
C) Future price falls; long earns a loss.
D) Futures price rises; long earns a profit.
Answer: B
You might also like to view...
Standard costs can be used by management to assess the reasonableness of actual costs incurred.
Answer the following statement true (T) or false (F)
From a borrower's perspective, you're better off with an ARM if interest rates rise
Indicate whether this statement is true or false.
Ambient advertising often uses digital technology to send its messages.
Answer the following statement true (T) or false (F)
A firm with assets value at $350,000 issues a 5 year zero-coupon bond with a par value of $400,000. Interest rates are 5% and the volatility of the company's assets are determined to be .29
If the company pays no dividend, what is the delta of the issued debt? A) .307 B) .324 C) .365 D) .396