If a financial manager earning interest on a future date were to buy 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

When interest rates go down, the price of futures typically rises. A financial manager who buys futures (goes long) would profit from an increase in futures prices.

If a Financial Manager Earning Interest on a Future Date