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

Question

Quizplus · Accepted Answer

An investor with a short position in Treasury notes futures will profit if interest rates increase because as interest rates go up, the prices of Treasury notes typically go down, making the short position profitable.

An Investor with a Short Position in Treasury Notes Futures