An investor who sells a T-bond futures contract is expecting to profit from:
A) an increase in the price of the T-bond.
B) an increase in the level of interest rates.
C) interest rates remaining unchanged.
D) the coupon payments from the T-bond.

Question

Quizplus · Accepted Answer

An investor who sells a T-bond futures contract is betting that interest rates will rise, which would cause the price of the T-bond to fall, allowing them to profit from the short position.

An Investor Who Sells a T-Bond Futures Contract Is Expecting