In futures markets investors who expect to purchase future bonds can reduce the risk of price fluctuations by taking a/an:

Question

Quizplus · Accepted Answer

A long position on futures contracts allows investors to lock in a fixed price for bonds at a future date, thereby reducing the risk of price fluctuations. This is because the futures contracts are standardized and traded on an exchange, providing a transparent and regulated marketplace for buyers and sellers to transact. Arbitrage and short positions involve more complex strategies and may not be appropriate or effective for all investors. A marked-to-market position simply reflects the current value of the investor's futures contract holdings and does not provide any risk mitigation benefits.

In Futures Markets Investors Who Expect to Purchase Future Bonds