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.

Question

Quizplus · Accepted Answer

If interest rates go down, futures prices rise, resulting in a loss for the short position.

If a Financial Manager with an Interest Liability on a Future