The value of an interest-rate futures contract will go up when
A) interest rates go up.
B) interest rates go down.
C) gold prices rise.
D) gold prices fall.

Question

Quizplus · Accepted Answer

Interest-rate futures contracts increase in value when interest rates decrease because the underlying bonds or interest-bearing assets become more valuable as their relative yield becomes more attractive compared to the new lower rates.

The Value of an Interest-Rate Futures Contract Will Go Up