An investor with a long position in Treasury notes futures will profit if
A) interest rates decline.
B) interest rates increase.
C) the prices of Treasury notes decrease.
D) the price of the S&P 500 Index increases.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

When interest rates decline, the prices of existing Treasury notes increase because new issues will offer lower yields. An investor with a long position in Treasury notes futures would profit from this increase in prices.

An Investor with a Long Position in Treasury Notes Futures